The Future of Capitalism

URL study guide

https://studiegids.vu.nl/en/courses/2024-2025/E_FIN_TFC

Course Objective

We live in a time where there is, again, much criticism of the free-market model. Work is getting more precarious, house prices are high around the world and there is genuine concern about whether finance benefits society. The concerns are heard from the general public but also from academics, politicians and central bankers. Some are worried about inequality or climate changes, others warn for the outsized influence of tech-giants or for governments that are over-borrowing and becoming too influential in economic life. However, most discussions are lacking an analysis of underlying beliefs. What should be the goal of economic policy? By what standards do we measure the performance of the economy? We need to able to answer these questions before making a case about the future of capitalism. In this course, we want to avoid easy straw-man arguments and dive into the underlying beliefs that have shaped the economic system. The primary objective is for students to be able to pinpoint which beliefs are implicit in institutional arrangements and what the consequences of their beliefs are on political choices. Specific attention will be paid to the values underlying our concept of ‘good work’ and how that matters for the political choices about the role of finance, international trade and labor law. How does finance benefit society? What is needed for free entrepreneurship to contribute to the common good? After following this course, you will be able to:
- describe the issues in the value of work and how this relates to the current economic framework
- formulate and defend your own views on how the economy and financial system contributes to the benefit of society
- give your own views on the economy and financial sector and where it should change

Course Content

The course content is centered around the areas of economic thinking where finance, societal issues and politics intersect. A snapshot of previous years' topics are:the benefits of finance to society, and its problemsthe causes of inequality and mechanisms that influence itvaluing the natural worldthe information problem of voters and its effect on economic policiesthe value of workers and human capitalthe financial frame for looking at climatic risksfinancing the green transitionfinding truth in datathe problem of economics as an algebra of happiness

Teaching Methods

A combination of lectures, student presentations and discussions. The course includes a field trip to a relevant political or economic institution, like parliament.

Method of Assessment

Graded assignments (70%) and an exam (30%)

Literature

Selected literature, papers, will be provided during the course. For an idea of what this course is about, the following is a list of articles that have been used in setting up the course.Admati, Anat, and Martin Hellwig. The bankers' new clothes. Princeton University Press, 2014.Bowles, Samuel, and Wendy Carlin. "Shrinking capitalism: Components of a new political economy paradigm." Oxford Review of Economic Policy 37.4 (2021): 794-810.Collier, Paul. The future of capitalism: Facing the new anxieties. New York: Harper, 2018.Coyle, Diane. GDP. A brief but affectionate history. Princeton University Press, 2015.Fourcade, Marion, Etienne Ollion, and Yann Algan. "The Superiority of Economists." The Journal of Economic Perspectives 29.1 (2015): 89-113.Haidt, Jonathan. The righteous mind: Why good people are divided by politics and religion. Vintage, 2012.Rajan, Raghuram G. "Has finance made the world riskier?." European financial management 12.4 (2006): 499-533.Robinson, J. A., & Acemoglu, D. (2012). Why nations fail: The origins of power, prosperity and poverty (pp. 45-47). London: Profile.Zingales, Luigi. "Presidential address: Does finance benefit society?." The Journal of Finance 70.4 (2015): 1327-1363.

Entry Requirements

The course is an elective in the MSc Finance master. This means that students from all tracks are eligble to participate. When you are following another Master program and want to participate, please contact the professor first.