An economist who predicted Trump's rise as early as 2011 explains how he's changing the face of American capitalism forever.


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  • Chicago Booth Business School professor Luigi Zingales believes that President Donald Trump is fundamentally altering the face of American capitalism.
  • Trump's embrace of so-called "crony capitalism" could lead to a permanent shift in how American politics functions.
  • "It's like when everyone waits in line to get the bus, or the ski lift, or to go to the office ... If one person deviates, you yell at him. If two deviate, you yell at them. If three deviate, you join them." 
  • In 2011, Zingales wrote a book in which he predicted the rise of a Trump-like figure in American politics, citing the success of Silvio Berlusconi in his native Italy.
  • The chapter of the book discussing that possibility was never published as colleagues said the idea was so far-fetched it would damage Zingales' reputation.

A widely respected economist who predicted the rise of Donald Trump as early as 2011 believes that by the time Trump's time in the White House is over, the face of American capitalism may be fundamentally altered forever.

Speaking to Business Insider in October, Luigi Zingales — a professor of entrepreneurship and finance at Chicago Booth Business School, whose work focuses on crony capitalism — said that Trump's willingness to appoint friends and allies to positions of power, particularly in the judiciary, has the potential to entirely shift how American politics functions.

Zingales, an Italian, has frequently compared Trump to four-time Italian Prime Minister Silvio Berlusconi, says what is likely to happen if Trump continues along that path is similar to what occurs in his native land — politicians of all stripes trying to influence people in positions that are meant to be free from political interference like judges and central bank governors.

In Italy, Zingales says, the probability senior members of the judiciary being leaned on by politicians prior to making important rulings is "100%."

In the USA, such attempts would be considered highly unusual, but President Trump's outspoken criticism of both the Mueller probe and the activities of the Federal Reserve under Chairman Jerome Powell is beginning to normalize such behaviour.

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"If I expect that the other side is going to try to get to the judge [and influence his decision], I will also try to get to the judge," he said.

If it were to become truly normal, Zingales said, that would be very difficult to reverse. What could happen, Zingales said, is much like people standing in line waiting for a bus. 

"It's like when everyone waits in line to get the bus, or the ski lift, or to go to the office. As long as everybody is in line, you don't like it, but you join the line as well.

"If one person deviates, you yell at him. If two deviate, you yell at them. If three deviate, you join them. At some point, if everybody goes, you can't be the only idiot still waiting in line."

Whether such institutionalized changes to the workings of American politics stick will depend, Zingales said, on how long Trump is president.

"What remains to be seen is to what extent this can be seen as an aberration, and then the world returns to a normal situation moving forward, or to what extent this is a permanent shift in the way politics is run in the United States, and the way people perceive it," he said.

The impact of such changes is likely to be much more long-lasting if Trump is reelected in 2020, and serves a full eight years in the White House.

"The negative impact is very dependent on this," he said. "My suspicion is that once people develop a reputation, it's very hard to go back."

"Once you shift the game, changing back ain't easy," he added.

Zingales' words are particularly powerful given that in 2011, he wrote a book in which he predicted that Trump, or someone very similar could end up as president. The chapter focusing on that possibly was never published after Zingales showed the book to a colleague.

"One of my colleagues who was kind of enough to read the first version told me that I was crazy, that I would lose credibility to the book if I were to keep that in," he said in a 2017 interview with Business Insider. 

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