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How to save democratic capitalism

The combination of a markets-based capitalist economy and a liberal democracy with almost-universal suffrage is very young, having existed for barely more than a century. But what we’ve learned in that short time is that there has never been a more successful political and societal arrangement. None of the tyrannies and the plutocracies that have been the default for nearly all of human history has ever been nearly as good at raising people’s living standards, and at giving people the individual freedoms to choose how they live their lives.


But that marriage between capitalism and democracy has always been a fragile one. And in the last decade or two, that system has been under threat from within the very liberal democracies where it exists, especially in the US and across parts of Europe. What happened?


The guest for this episode is Martin Wolf, the chief economics commentator of the Financial Times and author of a new book called The Crisis of Democratic Capitalism. As Martin writes:


The health of our societies depends on sustaining a delicate balance between the economic and the political, the individual and the collective, the national and the global. But that balance is broken. Our economy has destabilized our politics and vice versa… A big part of the reason for this is that the economy is not delivering the security and widely shared prosperity expected by large parts of our societies. One symptom of this disappointment is a widespread loss of confidence in elites. Another is rising populism and authoritarianism. Another is the rise of identity politics of both left and right. Yet another is loss of trust in the notion of truth. Once this last happens, the possibility of informed and rational debate among citizens, the very foundation of democracy, has evaporated.


Martin discusses these themes with Cardiff, what should be done to confront this crisis of democratic capitalism, what a "New New Deal" can look like, the threat (and opportunity) of China as a global superpower, and how Martin's own personal history influenced his values and thinking.


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Tuesday, December 20, 2022

Artificial intelligence and the economy of the future

Joining Cardiff for this episode is Avi Goldfarb, Rotman Chair In Artificial Intelligence and Healthcare At The Rotman School Of Management, University Of Toronto, and the co-author (with his fellow economists Ajay Agrawal and Joshua Gans) of an excellent new book, "Power and Prediction: The Disruptive Economics of Artificial Intelligence".In their chat, Avi and Cardiff discuss:Why AI is best understood as a "prediction technology"Examples of AI already in useWhich parts of the economy could be transformed by AI, and howHistorical analogies to previous eras of widespread technological disruptionHow AI will change the way people and companies make decisionsWhy this change will shift institutions away from blunt rules and towards individual discretionIn the labor market, who will gain and who will lose from the adoption of AIWhat the use of AI might teach us about what it means to be humanAnd all throughout the chat, they look at the fundamental question of whether artificial intelligence is about to make the economy—and the world—a whole lot weirder. And if so, just how far along that path to weirdness are we already?Related links: "Prediction and Power", by Ajay Agrawal, Joshua Gans, and Avi Goldfarb"The impact of AI on the future of workforces", The White House CEA and the European Commission“Before the Flood”, by Sam Hammond"The golden age of AI-generated art is here", by Tom Faber"Historical analogies for large language models", by Dynomight Internet Website