At this very early stage in the 2012 presidential campaign, the economy is getting most of the attention. From the deficit to taxes, changing Medicare and Social Security, to raising the debt ceiling — it’s all about the Benjamins and whether the government should play a larger or smaller role in managing the economy.We want to introduce you to someone who says it’s not one or the other — it’s both. Anatole Kaletsky is an economist and editor-at-large of the Times of London. His most recent book envisions a future where markets and government will have to work together in a way we haven’t seen before. He calls it “Capitalism 4.0.” Need to Know spoke with Kaletsky about his theory — but first, here’s a little historical perspective:
According to Kaletsky, Capitalism 1.0. was marked by Adam Smith’s “Invisible Hand” theory, which said that markets function best when they’re left alone. This period ended with the Great Depression. Capitalism 2.0 began in the 1930s with the New Deal, a time when people trusted government, not markets, to lead economic recovery. But this trust in government dissolved with the inflation of the 1970s. Capitalism 3.0 began in the 1980s. We know it as Reaganomics, the period when the market once again ruled. That ended with the financial crisis of 2008.
And that brings us to today, and Capitalism 4.0. Need to Know financial correspondent Stacey Tisdale sat down with Kaletsky to discuss who we should trust now.