Sebastian Mallaby: belief

Transcript context

…Why does classical liberalism seem to be dwindling today? Admittedly, you may choose to challenge the premise, but many countries are going in reverse. Democracy is not more popular. There seems to be less tolerance of other people’s ideas. What’s going on? What’s your most fundamental account of that? I think there are lots of strands to this debate, and I would just highlight two of them to set up my answer. I think the fact is that liberal capitalism has declined in popularity enormously since the 1990s when we thought that it had won. Fukuyama’s statement was blunter than other people’s when he said history was ending, but it wasn’t different to most people’s. It really did feel as though other countries were converging around that model. Now, you poll young Americans, and they prefer — or they say they prefer — what they call socialism. What they quite mean by that is another debate. Anyway, liberal capitalism is clearly falling out of favor. Now, is that because capitalism wasn’t as great as we thought it was in the 1990s, and now we’re spotting the flaws? Or is it because it was great but now it’s gone wrong? I think there’s some truth to the second, that it was great, but we’ve allowed some things to go wrong. In particular, we need more competition to prevent both monopoly and monopsony. We need to do more about state capture by lobbies. We need to do more about inequality because it’s all very well, saying you only care about equal opportunity, but income and wealth inequality is okay. But we know that the latter, the income inequality, bleeds into the former. Once you’ve got really severe inequalities of wealth, people can transfer that advantage to their kids. Things that happened in the 2000s, like the virtual elimination of the estate tax, are a really, really bad thing, and we need to undo that. It’s one thing to say we want strong incentives for entrepreneurship, and I’m all for that because I’ve just written this book about venture capital, and I believe in disruption in the economy, and I believe in risk-taking, and I believe people should be compensated for taking those risks. But at the same time, you need to reset to safeguard some equality of opportunity, and I think things like the estate tax ought to bite, and that’s really important. Last question: what’s your favorite movie and why?…

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