Dienstag, 18. April 2017

Interview: Prof. James Kwak, University of Connecticut School of Law

James Kwak is a professor at the University of Connecticut School of Law.

The picture ordinary people get nowadays from the news about economy is all about cacophony of economic ideas. What can economists resp. universities do to adequately illuminate the complex real-world issues?

I think one problem has been that some economists have been too quick to make sweeping pronouncements based on simple economic models that are not actually supported by empirical facts.

So, for example, one model says that under certain assumptions literally everyone benefits from international trade (because people who lose their jobs in the low-skill sector get new jobs in the high-skill sector).

But, in practice, we know that some people benefit and some people lose. So these simplistic arguments have misled policymakers and, perhaps more importantly, have discredited the field of economics for much of the public.

What is your take on ascent of sharing economy as a new economic model? Is it a kind of interesting middle ground between capitalism and socialism given the fact that some experts talk about “gift economy” and “human connectedness” etc.?

I don't see the "sharing economy" as a major new paradigm for economic activity.

As I see it, the sharing economy seems to be dominated by companies such as Uber and AirBnB, and it seems to be mainly a way for people to resell their spare capacity.

Therefore, I think it is quite consistent with the capitalist system.

What do you think to what extent the neoliberal economic and social policy of the EU that based on market fundamentalism responsible for the rise of the right-wing populism in Europa? 

I’m not an expert on the European Union, but my relatively uninformed sense is that neoliberalism is not the root cause of the rise of right-wing populism.

If we had social democratic states with good safety nets, I suspect that many of the factors behind right-wing populism would still be important—particularly issues of national identity, xenophobia, etc.

Thank you very much.

James Kwak has an undergraduate degree from Harvard University, a Ph.D. in intellectual history from Berkeley, and a J.D. from Yale Law School. He teaches business law and corporate finance at the University of Connecticut School of Law.

He is the co-author with Prof. Simon Johnson, of “13 Bankers” and “White House Burning”.

His current book “Economism” is published by Pantheon Books (2017).

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