What’s Wrong With Capitalism?

Years of elusive inflation and weak, unequally distributed growth across the advanced economies have led many to question whether capitalism itself is running out of steam. Can open markets and free enterprise be brought back into the service of the public good?

In this Big Picture, Joseph E. Stiglitz highlights several structural problems impeding growth, but singles out market concentration. Mariana Mazzucato blames the fetishization of shareholder value for creating a corporate culture of rent-seeking at the expense of value-creation. And Ngaire Woods shows how “free-market” arguments against state involvement in the economy have resulted in a reversal of progress across a wide range of development and economic indicators.

Taking an even broader view, Yanis Varoufakis argues that stagnation is – and always has been – capitalism’s logical resting place in the absence of external stimulus from the state or elsewhere. Raghuram G. Rajan reminds us that in addition to markets and the state, a healthy political economy requires a vibrant civil society. And Angus Deaton endorses Rajan’s diagnosis, but doubts that a revival of “community” can correct for the malign structural effects of meritocracy.