For decades, private equity has been the darling of pension funds, university endowments, and sovereign wealth funds, promising high returns and low volatility. Now, President Donald Trump has made it possible for everyday investors to get in on the magic with his executive order, "Democratizing Access to Alternative Assets for 401(k) Investors.” The order relieves regulatory burdens that limit the access of defined contribution plans, like 401(k)s, to alternative assets such as private equity (but also cryptocurrency and real estate). The hope is to give American workers access to greater choice, diversification, and potential growth towards a comfortable retirement. But Trump's order comes just as longstanding questions about private equity’s promise of high returns and low risk are coming to the fore. Has the distribution of returns slowed to a trickle? What does data actually say about private equity’s performance, and where is the industry headed? There is also a long standing debate whether private equity is good for society, independent of financial returns. Is private equity actually a ponzi scheme that now threatens the retirements of millions of American workers? To make sense of it all, Luigi and Bethany are joined by Dan Rasmussen, an experienced investor and author who began his career in private equity but has emerged as one of the most prescient critics of the industry. Together, the three of them distill what the state of the industry means for the future welfare of investors, workers, and the American economy as a whole.

What is the right way, if there is one at all, to integrate artificial intelligence (AI) technology into our education system? For Sal Khan, CEO of one of the world’s largest nonprofit education technology platforms, the answer is to take a step back and ask: Where can AI best complement current pedagogy? If a problem can be solved by pencil and paper, should we really be using AI instead? Khan joins Bethany and Luigi to discuss his recent book, “Brave New Words: How AI Will Revolutionize Education (And Why That’s a Good Thing),” in which he makes the case for why the education sector will not only survive but thrive in the age of AI. He shares his 17-year journey to build and grow his organization, which now provides over 10,000 videos on everything from integral calculus to art history, reaching more than 170 million registered users in over 20 languages, mostly for free. Together, the three talk about how and where AI can enhance the learning process: how AI has shifted Khan’s philosophy and approach to pedagogy, how it could democratize educational and economic opportunity, and what this all means for traditional modes of learning and instruction in schools and universities. They also discuss concerns about data ownership, Khan’s partnerships with tech companies, and the guardrails he proposes to protect education against the monetization of students’ data and the concentration of benefits to privileged children. Ultimately, he makes the case for why teachers aren’t going anywhere—and leaves aspiring nonprofit and civic leaders with advice on how to build a successful, mission-driven organization.

Americans are often told that they benefit from the privilege of the dollar serving as the world's currency. A strong dollar makes imports cheaper, facilitates demand for American companies, and is tied to cheap government borrowing. But what happens when this powerful privilege weakens? What does it even mean for the dollar to be “strong” or “weak” as a medium of exchange and investment? Why should Americans care that the dollar serves as the reserve currency for the world’s central banks? In his new book “Our Dollar, Your Problem,” Ken Rogoff, a Harvard professor and former chief economist for the International Monetary Fund, argues that the dollar is past “middle age” and that its global dominance will erode in the coming years. He predicts the dollar will eventually share power with the European Union’s euro and Chinese renminbi in a “tripolar” world. Rogoff joins Bethany and Luigi to discuss why the dollar's shifting dominance matters so much to the United States and what implications this has for the rest of the world’s payment network. He describes how the dollar has come under pressure from multiple directions, both now and in the past. Outside the U.S., these include past and current international challengers, such as the Soviet ruble, the Japanese yen, and the European euro. From within, the current instigators are rising federal debt, increased use of economic sanctions, and growing political dysfunction. The three also discuss if President Donald Trump’s boisterous support for cryptocurrency further undermines the U.S. dollar. Ultimately, they tease out how the dollar has underpinned American economic prowess for the last half century and what the consequences will be for the American economy – and the world at large – if the dollar is dethroned. Read a review of Rogoff’s book by Capitalisn’t team member Matt Lucky in ProMarket: https://www.promarket.org/2025/07/24/what-happens-after-the-dollars-hegemony-ends/

After the 2008 financial crisis, and especially after the COVID pandemic of 2020, an increasing number of Americans are questioning the wisdom of unregulated markets and envisioning a more active role for the state. Scholars have coined a panoply of neologisms to capture this view of the political economy, including political scientist Steven Vogel’s “marketcraft.” The term indicates that the state not only lays the foundation for markets through the protection of the rule of law and property rights, but it also shapes market economies through policy interventions and regulatory institutions like the Federal Trade Commission. Chris Hughes’ new book, “Marketcrafters: The 100-Year Struggle to Shape the American Economy,” traces how governments led by both major parties have worked with the private sector since the country’s founding to intentionally and strategically shape markets. The narrative reveals how Adam Smith’s proverbial “invisible” hand has always been rather quite visible. Hughes is a co-founder of Facebook who left the company in 2007 to work for former President Barack Obama and is now completing his PhD at the University of Pennsylvania’s Wharton School. Hughes joins Bethany and Luigi to discuss the government’s historical role, both in success and failure, of marketcrafting to rebalance economic power and create fairer and more efficient markets. Their journey takes us from the creation of the Federal Reserve in 1913 in response to a series of banking failures to recent mass investment in the semiconductor industry. Together, they discuss how to stop marketcrafting from becoming a victim of the political process, how it is operationalized differently in times of normalcy versus times of crisis, and how it must navigate the limits of individual and institutional power. Finally, they also discuss whether it is truly possible to craft markets in advance or only to correct market flaws after a crisis, with Hughes’ own prior stomping grounds at Facebook as their case study.

The Democratic Party has become too focused on appeasing its billionaire donors and has failed to communicate its commitment to the working class, argues long-time political journalist David Sirota. The question moving forward, he says, is if the party can ever refocus its brand orthodoxy from prioritizing social and cultural issues to economic populism. Sirota joins Bethany and Luigi to dissect the outsized role of money in American politics and how it has rendered Democratic messaging incoherent by prioritizing wealthy donors over the public. He describes the current moment of populist rage against the Democratic leadership, as evidenced by polls, as a “long overdue” opportunity and offers an explanation for how economic populism became pivotal to winning elections – thus shedding light on how to reclaim the platform moving forward. He describes how former President Barack Obama's "selling out" to Wall Street and big banks became a “generational tragedy,” why Trump’s tariffs are more of a power grab than legitimate economic policy to revive manufacturing, and responds to Luigi’s hypothesis that populist rhetoric and policy are much easier from the right than from the left. Sirota is the founder and editor of the investigative news outlet The Lever, served as a speechwriter for Bernie Sanders, earned an Academy Award nomination for screenwriting the 2020 Netflix climate apocalypse drama Don’t Look Up, and has written three books, including one on how corporate interests have shaped American economic policy. Over the last four years, Capitalisn’t has interviewed conservative thinkers like Oren Cass, Patrick Deneen, and Sohrab Ahmari to understand how the political right developed a new platform after President Joe Biden’s victory in 2020. With this episode, we continue the same project with the left, by asking: What could be the economic basis for a new progressive platform?

Are financial markets becoming less efficient? Famous investor Cliff Asness certainly thinks so. In his paper published last year, “The Less-Efficient Market Hypothesis,” Asness argues that social media and low interest rates, among other factors, have distorted market information so that stocks have become disconnected from their true values. This distortion has directed funds toward undeserving assets and firms and staved off necessary market corrections. Asness is the founder, managing principal, and chief investment officer at AQR Capital Management. He is an active researcher on various financial and investment topics and received an MBA and PhD in finance from the University of Chicago Booth School of Business. From her early days as a journalist reporting on Wall Street, Bethany recounts Asness as an outspoken, successful quant investor: one who invests based primarily on the fundamentals of the market rather than those of the firm. She also remembers him being “colloquial” and willing to be “experimental” with ideas. Asness’s recent paper continues that experimental style as he challenges the legacy of the efficient market hypothesis on which his PhD advisor, Nobel Prize laureate Eugene Fama, made his name, and which argues that asset prices reflect all available information, making it impossible to “beat” or outperform the market. Asness joins Bethany and Luigi to discuss how the market has fundamentally changed due to new technologies and macroeconomic trends and how investment strategies must adapt, what these changes mean for long-term productivity and growth, how researchers and investors should think about emerging market factors like tariffs and artificial intelligence, and why he's not investing in TrumpCoin anytime soon. Disclosure: In October 2024, Chicago Booth received a $60 million gift from Cliff Asness and John Liew to name its Master in Finance program. Bonus: Revisit our recent episode with Eugene Fama, Why This Nobel Economist Thinks Bitcoin is Going to Zero

Back in 2016, Joan Williams, distinguished professor of law (emerita) at UC Law San Francisco, wrote an essay for the Harvard Business Review on why President Donald Trump attracted so many non-college voters. It went viral with almost four million views, becoming the most-read article in the 90-year history of the publication. Williams’ new book, Outclassed: How the Left Lost the Working Class and How to Win Them Back, outlines how the seemingly common view that her fellow progressives must abandon their social causes to win back those non-college-educated voters is wrong. What is required, she argues, is a renewed understanding of class. She introduces her conceptualization of the “diploma divide,” or the gap between Americans with and without college degrees. Her worldview divides the electorate into three class-based groups: the college-educated, upper-class “Brahmin left”, the low-income working (middle) class, and the right-wing merchant class, which pushes for economic policies that benefit the rich. Her argument is that a new coalition between the latter two has shifted politics to the right. In this week’s Capitalisn’t episode, Luigi and Bethany invite Williams to discuss whether our society indeed breaks down so neatly. If it does, how does her breakdown help us understand recent electoral shifts and trends in populism and why the left is on the losing end of both? As she writes in her book and discusses in the episode, “[the Brahmin] left’s anger is coded as righteous. Why is non-elite anger discounted as “grievance?” Together, their conversation sheds light on how the left can win back voters without compromising on progressive values.Over the last four years, Capitalisn’t has interviewed conservative thinkers like Oren Cass, Patrick Deneen, and Sohrab Ahmari to understand how the political right developed a new platform after President Joe Biden’s victory in 2020. With this episode, we begin the same project with the left by asking: What could be the economic basis for a new progressive platform?

Lina Khan recently concluded her term as one of the Biden administration’s most controversial leaders. Her tenure as chair of the Federal Trade Commission raised the profile of the relatively obscure antitrust agency charged with protecting competition. Her anti-monopoly outlook and more aggressive enforcement strategies, particularly toward Big Tech market power and protecting workers, earned the ire of the business community and the dedicated vitriol of the Wall Street Journal editorial board. Khan began her term as the youngest-ever appointee of the FTC. She initially rose to prominence for her 2017 Yale Law Journal article, “Amazon’s Antitrust Paradox,” which went viral among the antitrust community for its argument that scholars and regulators must look beyond prices to understand what constitutes a harm from a lack of competition, especially in today’s digital economy where many services are nominally provided for free to consumers. Fresh out of law school, Khan appeared on a Capitalisn’t episode in our first season and wrote for our sister publication at the Stigler Center, ProMarket, as far back as 2018. She also delivered two keynote addresses at the Stigler Center’s annual Antitrust and Competition Conferences while FTC chair. On this episode, Khan returns to Capitalisn’t to reflect on her tenure, her vision of capitalism, and how her approach to enforcing existing laws with new thinking may have impacted the everyday lives of Americans. How does she respond to her critics, who include major Democratic business leaders? How does she view the new Trump administration, which is continuing many of her transformative policies, including revised merger guidelines and major lawsuits? As a senator, Vice President JD Vance said she was “one of the few people in the Biden administration actually doing a pretty good job.” Reflecting on her work, Khan also touches upon how conflicts of interest among corporate lawyers and consultants, former bureaucrats, and academics distort policymaking, court rulings, and market outcomes. Finally, she highlights the antitrust issues to pay attention to moving forward, such as algorithmic collusion.

The rule of law is essential to the flourishing of liberal democracy and capitalism. Yet, it is now under pressure in the United States, and corporate law firms are in the eye of the storm. Over the last few weeks, President Donald Trump has issued executive orders against several prominent law firms that represented his political adversaries and promoted diversity, equity, and inclusion (DEI) initiatives. Some of these law firms have caved into the administration’s demands to end such practices and provide pro bono services to the government, whereas others are fighting back. To discuss the financial reasons why some firms have capitulated while others have held out, and what the consequences are for the survival of the rule of law, Bethany and Luigi speak to John Morley, Augustus E. Lines Professor of Law at Yale University and an expert on the economics of law. Are Trump’s orders unconstitutional, and if so, why have so many law firms reached a deal with him? How have changes to law firms’ business models left them particularly vulnerable to a moment like this? Why are some firms more vulnerable to political attacks than others? Together, the three discuss the firms’ reciprocal agreements with the administration, the possibilities for a collective-action response, and how this moment may profoundly reshape the future of law, democracy, and capitalism in America.

All too often, capitalism is identified with the for-profit sector. However, one organizational form whose importance is often overlooked is nonprofits. Roughly 4% of the American economy, including most universities and hospital systems, are nonprofit. One prominent nonprofit currently at the center of a raging debate is OpenAI, the $300 billion American artificial intelligence research organization best known for developing ChatGPT. Founded in 2015 as a donation-based nonprofit with a mission to build AI for humanity, it created a complex “hybrid capped profit” governance structure in 2019. Then, after a dramatic firing and re-hiring of CEO Sam Altman in 2023 (covered on an earlier episode of Capitalisn’t: “Who Controls AI?”), a new board of directors announced that achieving OpenAI’s mission would require far more capital than philanthropic donations could provide and initiated a process to transition to a for-profit public benefit corporation. This process has been fraught with corporate drama, including one early OpenAI investor, Elon Musk, filing a lawsuit to stop the process and launching a $97.4 billion unsolicited bid for OpenAI’s nonprofit arm. Beyond the staggering valuation numbers at stake here–not to mention OpenAI’s open pursuit of profits over the public good–are complicated legal and philosophical questions. Namely, what happens when corporate leaders violate the founding purpose of a firm? To discuss, Luigi and Bethany are joined by Rose Chan Loui, the founding executive director of the Lowell Milken Center on Philanthropy and Nonprofits at UCLA Law and co-author of the paper "Board Control of a Charity’s Subsidiaries: The Saga of OpenAI.” Is OpenAI a “textbook case of altruism vs. greed,” as the judge overseeing the case declared? Is AI for everyone, or only for investors? Together, they discuss how money can distort purpose and philanthropy, precedents for this case, where it might go next, and how it may shape the future of capitalism itself.