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The cover of A Capitalism for the People

A Capitalism for the People

Luigi Zingales

How can free markets be rescued from the business interests that have captured them, so they work for ordinary people again?

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At a glance

Author
Luigi Zingales

Why read it

  • You will learn to tell a genuinely competitive market from one rigged by powerful insiders
  • You will see why competition benefits everyone but few people pay to protect it
  • You will understand why anger at bankers and politicians is justified, and why acting on it carelessly could hurt the system

Who it is for

  • A voter angry at bankers and unsure what to demand
  • A business person who believes in markets but doubts big firms
  • A student of economics asking what keeps markets fair

The idea people argue about

Zingales's most debatable proposal is that a populist movement can defend capitalism by attacking the alliance between large firms and government. A common objection is that populism often rewards anger, protection, and political favoritism, which can weaken the competition he wants to restore. Zingales answers by drawing a strict line between being friendly to markets and being friendly to established businesses. He supports rules that make entry and failure possible, opposes subsidies and selective rescues, and treats concentrated political influence as a threat to both legitimacy and efficiency. This is a program for a particular kind of populism rather than a prediction about movements that use the label. Its unresolved difficulty is institutional: the book explains why dispersed citizens need a competitive system, but the firms that benefit from exceptions often have stronger information, organization, and incentives when rules are written.

Three common misunderstandings

  1. Supporting capitalism does not mean supporting every corporation or protecting every investor and senior manager from loss. Zingales argues that competition requires firms to fail and treats privileges for connected incumbents as corruption of the market rather than its defense.
  2. The book does not reduce the underlying political problem to inequality by itself. Its central concern is whether wealth comes from creating value under competition or from capturing regulations, subsidies, bailouts, and barriers that transfer value.
  3. Opposition to bailouts is not presented as indifference to workers, depositors, or the systemic danger of financial panic. Zingales argues for rules and safety mechanisms designed in advance, because emergency discretion can reward risk taking and strengthen expectations of future rescue.

Contents

  1. PREFACE
  2. INTRODUCTION
  3. AMERICAN EXCEPTIONALISM
  4. A CRISIS OF CONFIDENCE IN CAPITALISM
  5. THE BETRAYAL OF THE ELITE
  6. TIME FOR POPULISM
  7. A CALL FOR CHANGE
  8. A PROMARKET POPULIST AGENDA
  9. PART ONE - THE PROBLEM
  10. WHAT IS SO SPECIAL ABOUT THE UNITED STATES?
  11. Historical Factors
  12. Geographical Factors
  13. Cultural Factors
  14. Institutional Factors
  15. THE LUCKY OUTCOME
  16. WHAT IS MERITORIOUS?
  17. THE TENSION BETWEEN DEMOCRACY AND MERITOCRACY
  18. TIGER WOODS AND THE GREENSKEEPERS
  19. MANY GREENSKEEPERS LEFT BEHIND
  20. THE DEATH OF HORATIO ALGER
  21. CONCLUSIONS
  22. THE BENEFITS OF COMPETITION
  23. THE EAST INDIA COMPANY
  24. THE TRADITIONAL VIEW OF MONOPOLIES
  25. THE BENEFITS OF ANTITRUST LAW
  26. OTHER PEOPLE’S MONEY
  27. CRONYISM
  28. THE POLITICIZATION OF DECISIONS INSIDE FIRMS
  29. MODERN-DAY EAST INDIA COMPANIES
  30. CONCLUSIONS
  31. HOW DID IT HAPPEN?
  32. TOO MUCH POWER
  33. TOO BIG TO FAIL
  34. TOO BIG TO MANAGE
  35. TOO “SMART” TO MANAGE
  36. TOO OLIGOPOLISTIC
  37. THE MODERN TEAMSTERS
  38. THE GROWING LEVIATHAN
  39. TULLOCK’S PARADOX
  40. THE PROBLEM WITH PORK
  41. THE DEMISE OF THE ANTIBUSINESS IDEOLOGY
  42. THE PROTOTYPICAL PRIVATE-PUBLIC PARTNERSHIP
  43. RUBIN’S BAILOUT DOCTRINE
  44. THE GREENSPAN PUT
  45. BAILOUT NATION
  46. CONCLUSIONS
  47. BEWARE OF EXPERTS
  48. ESPRIT DE CORPS, INBREEDING, AND GROUPTHINK
  49. CONCLUSIONS
  50. THE GOLDEN AGE
  51. THE WORLD IS CATCHING UP
  52. THE MODERN FARMERS
  53. THE POPULIST REACTION
  54. WHICH POPULISM?
  55. PROMARKET POPULISM
  56. PART TWO - SOLUTIONS
  57. THE DISTURBING PICTURE
  58. OF FARMS AND EBOOKS
  59. THE ECONOMICS OF WINNER-TAKE-ALL
  60. THE VALUE OF BOSSES

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