Welcome to Econ Talk, part of the Library of Economics and Liberty.

I'm your host, Russ Roberts of Stanford University's Hoover Institution.

Our website is econtalk.org, where you can subscribe, comment on this podcast,

and find links and other information related to today's conversation.

We'll also find our archives where you can listen to every episode we've ever done going back to 2006.

Our email address is mailadycontalk.org. We'd love to hear from you.

Today is May 4, 2020, and my guest today is economist and author Rebecca Henderson.

She is the John and Natty MacArthur University professor at Harvard University and teaches in the Harvard Business School.

Her latest book in our topic for today is reimagining capitalism in a world on fire.

Rebecca, welcome to Econ Talk.

Russ, thank you very much. It's a pleasure to be here.

I want to alert people listening at home. We are recording this in the middle of the COVID-19 experience.

It could affect our audio quality a bit. We're not able to use some of our usual equipment.

And broadband is a little if-year in a house with four people at home unexpectedly,

often using internet during the day.

And we may or may not talk about COVID-19. There's plenty to talk about in the book outside that.

So we'll see how this goes.

Your book asks us to reimagine capitalism. What's wrong with the way that capitalism is now and what problems do you hope to fix?

Let me begin by saying I'm a huge fan of capitalism. I think it's one of the greatest inventions of the human race.

But I think in our current incarnation, we've allowed it to become unbalanced.

I see three problems. First, accelerating inequality.

A very significant fraction of the productivity gains from our booming economy over the last 20 years went to those at the very top of the distribution.

...