211. Corporate Influence and the Economy feat. Luigi Zingales

In today’s world, corporate lobbying is everywhere. Corporations wield immense power over our economy and use their economic clout to influence policymakers, politicians and regulators in a way that can lead to corporate welfare and crony capitalism. 

Luigi Zingales is a finance professor at the University of Chicago Booth School of Business and the author of two widely-reviewed books, “Saving Capitalism from the Capitalists” and “A Capitalism for the People”. He is also a faculty research fellow for the National Bureau of Economic Research, the Center for Economic Policy Research, and a fellow of the European Governance Institute. He is also the director of the Stigler Center for the Study of the Economy and the State.

Luigi Zingales' research interests span from corporate governance to financial development, from political economy to the economic effects of culture. He co-developed the Financial Trust Index, which is designed to monitor the level of trust that Americans have toward their financial system.

Luigi and Greg talk about the problematic revolving door policy of politicians and lobbyists, why the conceptual distinction between being pro-market and pro-business has dissolved, and how we can practically enforce some kind of social norm around corporate lobbying.

Episode Quotes:

How could we enforce some social norms around corporate lobbying?

46:51: My first step would be disclosure. Today, we know a little bit of the money that technically is registered as lobbying, but we don't know the donations. We don't know all the other ways in which companies spend our money. Okay. So the first one would really be some disclosure. The second is I think that these days we shame individuals for everything, even for not capitalizing the B in black, and I think that we should take a step back and focus on what is really important. 

Intellectual circles use groups and group dynamics to isolate dissenters. 

32:15: Intellectual circles use groups and group dynamics to isolate dissenters. So, what you're trying to do is if you make a criticism that is dangerous, then you are immediately labeled something that is unacceptable. 

Is there any hope for the rescue of populism? 

55:13: The biggest problem is that we don't talk to each other. And even if we don't understand each other, it is very rare to see two opponents having a spirited debate, because I'm not saying we should all agree. In fact, the fun is when we don't agree, but at least we agree to have the same set of rules and not to insult each other every three words.

Show Links:

Recommended Resources:

• Colin Mayer Episode

Guest Profile:

• Faculty Profile at The University of Chicago
• Speaker’s Profile on HiCue Speakers
• Professional Profile on The Centre for Economic Policy Research
• Luigi Zingales on Twitter
• Luigi Zingales on LinkedIn

His Work:

• Luigi Zingales on Google Scholar
• Capitalisn't Podcast
• A Capitalism for the People: Recapturing the Lost Genius of American Prosperity
• Saving Capitalism from the Capitalists: Unleashing the Power of Financial Markets to Create Wealth and Spread Opportunity

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