center events: calendar

The Center’s 10th annual conference, “Healing the Big Fractures in the Economy, Politics & Society,” held virtually on February 18–19, 2021, convened a distinguished array of prominent researchers from the fields of economics, psychology, public policy, finance, law, government and behavioral science to take an interdisciplinary, evidence-based approach to this question, with an eye on pragmatic policy solutions.

Barely four weeks after the inauguration of President Joe Biden, amid continuing economic, health and climate crises and a rise in political tensions, the keynote speakers Jay Van Bavel—Associate Professor of Social Psychology, Cognition and Perception, and Neural Science, and Director of the Social Identity & Morality Lab at New York University—and Mariana Mazzucato—Professor in the Economics of Innovation and Public Value at University College London (UCL) and Founding Director of the UCL Institute for Innovation & Public Purpose—offered insight in deciphering the unprecedented events of 2020, as well as a roadmap for where to go from here. The first day of the conference focused on politics, examining political partisanship, polarization, and misinformation in the United States and around the world. The second day focused on economics, investigating the question of how to increase investment to meet the challenges of 2021 and beyond in an equitable, inclusive and sustainable way.

We need to think differently. We need to admit that value is created collectively, not just from business, but also from different types of actors in the public sector and the third sector, and none of the big challenges that we have that are underneath the 17 Sustainable Development Goals...are going to be solved by one actor alone. —Mariana Mazzucato

Nolan McCarty, Susan Dod Brown Professor of Politics and Public Affairs at Princeton University and moderator of the session, kicked off the first panel, which examined the rise in partisanship and political violence, and offered some practical steps to combat misinformation and reduce polarization.

Yphtach Lelkes, Assistant Professor of Communication and Political Science at the University of Pennsylvania, began by asking, “Are we driven by hate or fealty?” Though many assume that animosity towards the opposition is driving polarization, Lelkes said that based on his survey research, in-group attachment, or wanting to help your own side, is more important than trying to hurt the other side.

Lilliana Mason, Associate Professor of Government and Politics at the University of Maryland, College Park and author of Uncivil Agreement: How Politics Became Our Identity, spoke about the links between political violence and partisan identity in the US. Political leaders have an important role to play in addressing hyper-partisanship and political violence, Mason concluded, noting that strong partisans who read an anti-violence message from their leader are much less likely to condone violence than those in a control group.

Drawing on his own work, Sander van der Linden, Professor of Social Psychology at the University of Cambridge, argued for inoculation against misinformation by training people to identify fake news through an online app, Bad News. The ultimate goal, said van der Linden, is to attain herd immunity and have a critical mass of people inoculated against misinformation to limit its spread.

Moderated by Atif Mian, the second panel explored policies to boost investment and promote growth in areas of economic decline. featured two speakers.

Simon Johnson, Professor of Entrepreneurship, Economics and Management at MIT, began by highlighting the geographic segregation of innovation in the US and argued for more public investment in education, research and development to catalyze innovation and growth in all regions of the country.

Thomas Philippon, Professor of Finance at NYU, noted that total US after-tax corporate profits are very high as a percentage of GDP, but net investment by private companies is quite low. The most profitable corporations are not plowing profits back into existing or new businesses, but rather saving the cash or buying out shareholders. This behavior is driven partly by a lack of competition, Philippon argued. The investment gap is most visible in industries that are more concentrated; addressing this lack of competition will be crucial to spurring private investment in the US in the future.

Moderated by Ilyana Kuziemko, Professor of Economics at Princeton University, the last panel honed in on the structural changes required to make the growth process more equitable. While redistribution can reduce inequality today, how can we ensure that future growth is also inclusive and shared?

Trevon D. Logan, Professor of Economics at The Ohio State University, emphasized the need to look more deeply at how current and past policies legalized segregation and discrimination and deliberately created unequal economic growth. Achieving more equitable growth in the future, Logan concluded, “requires acknowledging the ways in which race has shaped our history.”

Katharina Pistor, Professor of Comparative Law at Columbia Law School and author of the 2019 book The Code of Capital: How the Law Creates Wealth and Inequality, focused on the idea of pre-distribution, or how wealth is created before it is distributed. She emphasized how historical inequities in access to the legal code, which enforces private property rights in the US, have contributed to inequalities in the present day. Pistor advocated rolling back the private law “steroids” that have maintained these inequities, as well as a larger “recoding project” focused on the legal framework in order to eliminate state-sanctioned discrimination and strengthen legal insurance against risk.

Gabriel Zucman, Professor of Economics at the University of California, Berkeley, followed with a discussion of the calls for a progressive wealth tax. In evaluating the potential for an effective wealth tax in the US, Zucman highlighted the shortcomings of European systems of wealth taxation, namely: tax competition between countries, tax evasion, and low exemption thresholds. The history of taxation in the US is “full of U-turns”; however, he argued, an American wealth tax could work, with the right policy choices.

Polarization in the interpretation of crowd sizes doesn't matter, of course. They’re politically significant, but they don’t affect people’s life or death. But when you have something like this—a virus, a pandemic—filtered through that lens, it can become incredibly devastating. —Jay Van Bavel