Luigi Zingales

In 1971 the federal government guaranteed a $250 million loan to Lockheed Aircraft. It was the first time in history that the federal government had come to the rescue of a single failing firm (or, more precisely, its creditors).[1] By the end of the 1970s, Penn Central Railroad and Chrysler would also receive bailouts. In 1984, it was Continental Illinois. And on the eve of the ‘90s it was the creditors of hundreds of savings and loan associations. Nothing, however, would compare to 2008. In a single year, the federal government bought stake in or bailed out hundreds of private financial and automotive firms. The rules of the bailout game, if there were any, were not always clear. Having come to the aid of Bear Stearns (via J.P. Morgan) and Fannie Mae and Freddie Mac, the federal government stunned creditors when it let Lehman Brothers fall in mid- September 2008. But just 2 days later, bailouts resumed when the Federal Reserve made an $85 billion emergency loan to insurer American International Group.The experience left a lot of people reexamining their beliefs about American capitalism. From then on, were all large firms assumed to have the full faith and credit of the federal government behind them? Was there any way to credibly commit not to bail out systemically significant financial institutions? What cultural and political norms and taboos had the bailouts shattered? And how did these changes affect the public’s perception of government and “free market” capitalism? We are fortunate that one of the people thinking about these questions was Luigi Zingales. He recorded his first observations on the crisis in a must-read piece in National Affairs titled “Capitalism After the Crisis” (2009). Now he has expanded those observations to book-length in A Capitalism for the People.Zingales is as qualified as anyone to address these questions, and that’s not just because he is an extraordinarily creative and productive financial economist of the University of Chicago’s Booth School of Business. He’s also an Italian emigre who is refreshingly unafraid to draw on his personal biography to make his case.… (mere)

A powerful rallying cry for "pro-market populism," like his previous co-authored book ("Saving Capitalism from the Capitalists"), this one espouses a pro-market but not pro-business view that is deeply skeptical of rent seeking, lobbying, and business-government partnerships more broadly. The first half starts out with a tribute to American exceptionalism which he sees as coming from democracy that preceded industrialization, flourished before government grew large and was mature before it entered into foreign competition. He sees the growing size of government, lobbying, bailouts, etc., as undermining this form of capitalism. The second half of the book is a set of recommendations for what to do about it, ranging from tax reform and financial regulation reform to a discussion about how to create a more civic culture premised on trust and averse to rent seeking. Many of the ideas are avowedly impractical.… (mere)

Lasciando agli esperti il giudizio su di un testo che, seppur divulgativo, è sufficientemente tecnico da spiazzare il lettore non competente, è evidente che sia stato scritto per un pubblico statunitense e che per esso esamini la storia economica alla luce delle recenti criticità. Possiamo dire che sia genericamente un'ode al libero mercato, che vive di sana competizione, più che un manifesto ideologicamente capitalista. Possiamo tirare un sospiro di sollievo insieme all'autore: abbandonate le velleità rivoluzionarie anticapitaliste sembra evidente dall’atteggiamento dell’economista che il capitalismo sia un buon sistema economico - a fronte di nessun altro esistente, almeno il migliore a disposizione. Anche le conclusioni sono condivisibili: la corruzione e il clientelismo più spinti hanno fatto degenerare quei principi di competizione economica che spingono alla realizzazione di migliori condizioni di vita per tutti. E proprio su questo punto dobbiamo abbandonare l’autore per sferrare la nostra critica più severa: in tutto il volume non si parla di profitti, di avidità, di quella potente (sana o meno) spinta all’accaparramento e accumulazione - propensioni che sono alla base del successo inarrestabile del capitalismo. Sono le indomite, ancestrali necessità materiali di protezione e potere a dirigere e decretare il successo di questo sistema. Che portano però inevitabilmente allo sfruttamento, alla sottomissione delle forze produttive. Come dimenticarsi di queste ancora irrisolte nefaste conseguenze?… (mere)