What Will U.S. Capitalism Look Like in 50 Years? Seven Experts Weigh In

“Prediction is hard, especially about the future,” the saying goes.

Certainly, looking ahead 50 years from 1975, economic prophets would have been hard-pressed to foresee the waves of deregulation, high interest rates and tax cuts that occurred over the next decade, or the rise of finance, privatization and globalization that began in the 1990s. Few would have predicted the transformative power of the internet, the financial crash of 2008, the economic paralysis of the pandemic and lockdowns, or the return of tariffs and protectionism with the second Trump administration.

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Nonetheless, we thought we’d give prediction a try. We asked economists and economic historians to tell us: What do you think U.S. capitalism will look like in 50 years, and how will it be different from today?

They had plenty to say:

Daron Acemoglu: Which AI path will we choose?

We are at a crossroads, largely because of new transformative technologies such as artificial intelligence.

The most likely future is an economy dominated by a handful of tech companies, with AI tools automating a whole range of tasks previously performed by humans. This future would become a reality if AI advanced rapidly into artificial general intelligence—whereby AI models become as capable as expert-level humans in all cognitive tasks. But large-scale automation could proceed before, or in fact without, such AGI. This type of “so-so automation” would have a lot of the downside of AGI (rapid displacement of workers) but not much of the advantages (productivity gains would be limited).

Under our current institutional path with little antitrust enforcement and widespread political acceptance of Big Tech’s wishes, this automation future would likely witness continued consolidation in the tech sector, with a few behemoths not just dominating technology, but a growing range of other industries as well.

What’s more, this will usher in massive inequality—between a small cadre of highly skilled workers who continue to perform essential tasks and the rest who are either dispensable or displaced from their jobs, and between the tech barons in control of the leading AI companies and the rest.

Another future is one in which fears of AI motivate governments to take control, creating a type of AI-state capitalism. The state collects extensive data and either directly or indirectly controls the means of production and the means of data processing.

There is nothing inevitable about growing concentration in the tech sector or in the economy more generally. Nor are automation and surveillance our only prospects. There is a pro-worker direction for AI, where it can be used to enable humans to perform more sophisticated and new tasks.

Think of AI providing useful, context-specific information to electricians, blue-collar workers, nurses, educators and others, so that they can be better at their jobs and do new things that weren’t possible without such information and real-time help. This future can bring greater productivity (rather than so-so automation) and gives us a chance to reduce rather than boost inequality (as demand for human work increases with their expanded capabilities).

This better future isn’t a chimera. Greater market competition would make this future much more likely. Current AI capabilities are up to the task. Yet, it is not the direction in which we are heading. Growing concentration and obsession with AGI in the tech industry are taking us to a more-dystopian future.

We need a wake-up call in this most critical of times, so that we can choose a brighter future that will work for workers of all backgrounds, not just for tech barons.

Daron Acemoglu is an Institute professor of economics at the Massachusetts Institute of Technology. In 2024, he was awarded the Nobel Prize in economic sciences.

Jennifer Burns: The fading of the administrative state

In 50 years, American capitalism will remain a dynamic, innovative engine of growth. Despite headwinds today, the pattern of 250 years is unlikely to end. The country remains blessed with ample natural resources, an enviable geography that shelters it from external threats, and a federal system that preserves political diversity and experimentation within the world’s oldest constitutional framework. 

What will look different is the relationship between capitalism and the American state, and the importance of geopolitics to economic policy. The looming fiscal crisis in the 2020s, caused by soaring budget deficits and an inevitable entitlements crunch, will accelerate the political and economic exhaustion of the regulatory administrative state. Already, both major parties are defined by efforts to undo the legal structures designed to adjudicate between capital and labor in an industrial economy—witness DOGE in the Republican Party, and the abundance movement in the Democratic Party. 

Re-established upon the realities of a postindustrial economy and constrained by fiscal realities, the American state of the 21st century will necessarily incorporate the technologies of Silicon Valley and its mindset, modified for the realities of democratic governance. 

A major driver of economic change will be the nation’s transition from a unipolar to a multipolar global order. The dollar may still enjoy its exorbitant privilege, but within a world shaped by alternative currencies and central-bank digital currencies, U.S. policymakers will need to earn this privilege through transparency, trust and unflinching commitment to the rule of law.

Just as World War II led to a transformation in government’s relationship to the tech and higher education sectors, we can expect that the pressures of this new global order—what some have dubbed Bretton Woods III or identified as the third world war—will redound inside the U.S.

Increased government investment in sectors deemed critical to national security will accelerate, and we may even see a return to the Cold War era belief in dispersal, the practice of locating military bases across the country to avoid nuclear war. The new dispersal would focus on seeding centers of economic growth outside of the coasts, to at once satisfy domestic political demands and national security concerns.

Jennifer Burns is a professor of history at Stanford University and a research fellow at the Hoover Institution. She is the author of “Milton Friedman: The Last Conservative.”

Oren Cass: Restore U.S. capitalism—or else

American capitalism’s decay in recent decades is the result of the most profitable activities diverging ever further from the most socially valuable ones.

If the highest returns on investment come from offshoring, financial engineering and the development of addictive social-media applications and monopoly platforms, that is where capital will flow. If the highest salaries are paid to high-frequency traders, the talent will follow. Real investment declines, growth slows, industry atrophies, wages stagnate and economic power shifts elsewhere. On this trajectory, capitalism won’t last another 50 years, which would be a terrible tragedy.

If the U.S. succeeds in rebuilding a well-functioning capitalism, it will be an economic system in which constraints channel capital toward productive pursuits. The unfettered globalization and practically open borders of the early 21st century will be a rueful memory, replaced by a bounded domestic market that tilts the playing field toward domestic production and accepts international trade only so long as it is balanced.

Tariffs and capital controls will both play important roles in making domestic investment more attractive than offshoring. Within the domestic market, industrial policy will subsidize investment in high-risk, capital-intensive sectors while financial regulation will discourage unproductive speculation. Much stronger antitrust enforcement and consumer protection will eliminate the extraordinary rents otherwise available to monopolists and purveyors of addictive slop.

Underlying these policy changes will be a more-fundamental shift in political economy that rejects denuded consumerism in favor of a richer conception of human flourishing. Rather than optimize solely for efficiency and cheap stuff, citizens will demand that markets foster broad-based prosperity built upon family-supporting jobs, strong communities and a robust industrial base. Capitalism can deliver on those goals if it is reoriented toward them, and that is the task now awaiting American policymakers.

Oren Cass is the chief economist at American Compass and writes the Understanding America newsletter for Commonplace.

Carola Frydman: A new public-private model

The freedom for businesses to operate in a market with limited government intervention has long been a cornerstone of American capitalism. From family-financed ventures in the nation’s early years to today’s tech giants, profit-driven firms have transformed ingenuity into innovation, fueling growth for more than two centuries. Yet sustaining economic growth at home and competitiveness abroad may increasingly require closer coordination between government and business.

In the decades ahead, American capitalism may be shaped less by unfettered competition and more by strategic oversight. As market power concentrates in a few dominant firms, policymakers are likely to strengthen antitrust enforcement. But laws designed a century ago for railroads and industrial trusts may prove inadequate for the modern tech economy, requiring significant overhaul. And while mandated corporate breakups have been rare, these practices could become more likely to protect competition and spark innovation.

At the same time, the existing cooperation between government and business may deepen through public-private partnerships, directed investment, and support for critical resources such as skills upgrading and infrastructure development. These efforts are most likely to emerge in sectors central to national security and global leadership—from semiconductors and advanced manufacturing to clean energy and defense. Unlike countries that rely on state ownership or centralized control, an American system would emphasize independent agencies working alongside private firms, building on models once used to advance defense leadership.

The result could be a form of state capitalism with distinct American design—one that doesn’t replace market forces but harnesses them for national prosperity in an increasingly competitive world.

Carola Frydman is the Harold L. Stuart Professor of Finance and the faculty director of the John L. Ward Center for Family Enterprises at the Kellogg School of Management at Northwestern University.

R. Glenn Hubbard: A stronger safety net

Modern industrial capitalism’s bounty has been breathtaking globally and especially in the U.S. It’s tempting, then, to look at critics in the crowd in Monty Python’s “Life of Brian” as they ask, “What have the Romans ever do for us?,” only to be confronted with a large list of contributions. But, in fact, over time, American capitalism has been saved by adapting to big economic changes.

We’re at another turning point, and the pattern of American capitalism’s keeping its innovative and disruptive core by responding, if sometimes slowly, to structural shocks will play out as follows. 

The magnitude, scope and speed of technological change surrounding generative artificial intelligence will bring forth a new social insurance aimed at long-term, not just cyclical, impacts of disruption. For individuals, it will include support for work, community colleges and training, and wage insurance for older workers. For places, it will include block grants to communities and areas with high structural unemployment to stimulate new business and job opportunities. Such efforts are a needed departure from a focus on cyclical protection from short-term unemployment toward a longer-term bridge of reconnecting to a changing economy. 

These ideas, like America’s historical big responses in land-grant colleges and the GI Bill, combine federal funding support with local approaches (allowing variation in responses to local business and employment opportunities), another hallmark of past U.S. economic policy. 

With a stronger economic safety net, the current push toward higher tariffs and protectionism will gradually fade. Protectionism is a wall against change, but it is one that insulates us from progress, too. 

A growing budget deficit and strains on public finances will lead to a reliance on consumption taxes to replace the current income tax system; continuing to raise taxes on saving and investment will arrest growth prospects. For instance, a tax on business cash flow, which places a levy on a firm’s revenue minus all expenses including investment, would replace taxes on business income. Domestic production would be enhanced by adding a border adjustment to business taxes—exports would be exempt from taxation, but companies can’t claim a deduction for the cost of imports.

That reform allows a shift from helter-skelter tariffs to tax reform that boosts investment and offers U.S. and foreign firms alike an incentive to invest in the U.S. 

These ideas to retain opportunity amid creative destruction will also refresh American capitalism as the nation celebrates its 250th anniversary. They also celebrate the classical liberal ideas of Adam Smith, whose treatise “The Wealth of Nations” appeared the same year. This refresh marries competition’s role in “The Wealth of Nations” and American capitalism with the ability to compete, again a feature of turning points in capitalism in the U.S.

Decades down the road, this “Project 2026” will have preserved the bounty and mass prosperity of American capitalism.

R. Glenn Hubbard is dean emeritus and Russell L. Carson Professor of Finance and Economics at Columbia Business School. Hubbard was chairman of the President’s Council of Economic Advisers under President George W. Bush.

N. Gregory Mankiw: Six predictions

My crystal ball, like that of all economists, is cloudy. But if I squint, some patterns for the U.S. economy 50 years from now take shape.

• Thanks to advances in technology, the income of the average American, adjusted for inflation, will be about twice what it is today.
• Substantial inequality will persist, and populist agitators will continue to argue that the elites have rigged the economy. Partly as a response, the social safety net will become more robust, including a modest universal basic income.
• Taxes will be higher to fund the expanded safety net, and because people will have learned that government debt relative to GDP cannot rise forever. Like most of the world today, the U.S. will have a value-added tax.
• Workweeks will be shorter due to both the disincentive effect of higher taxes and the desire of most people to use their greater prosperity to enjoy more leisure.
• Manufacturing employment will have nearly disappeared, but manufacturing output will remain strong with robots doing most of the work. Service jobs will expand, and entirely new jobs we cannot now imagine will emerge.
• Acknowledging past mistakes, the government will eschew most heavy-handed interventions in competitive markets, such as industrial policy, tariffs, minimum wages, rent control and Nimby zoning.

These developments will be deemed desirable by most of the public and economists at the time. To paraphrase Martin Luther King Jr., if he were an economist: The arc of the economic universe is long, but it bends toward efficiency.

N. Gregory Mankiw is the Robert M. Beren Professor of Economics at Harvard University. From 2003 to 2005 he was chairman of President George W. Bush’s Council of Economic Advisers.

Joel Mokyr: Capitalism will keep adapting

In his “Capitalism, Socialism and Democracy,” the economist Joseph Schumpeter asked in 1942, “Can Capitalism survive?” His answer was, “No, I don’t think it can.” Eighty years later, it is still here. What Schumpeter failed to see is that capitalism has survived because it is flexible and adaptable. The protean capitalist system of production has found ways to adjust to new realities by observing market forces and identifying social needs and turning them into business opportunities. The future will experience more economic shocks—above all, the end of population growth and the aging of the world population, and the hard realities of a global physical environment under increasing stress.

Capitalism thrives on innovation. Innovation will provide AI-managed, robotic geriatric care as the percentage of octogenarians rises. With more people of advanced age living longer and fewer younger people who pay in the Social Security system, entrepreneurs will find employment for older people if they can and wish to work. Climate change will focus capitalists on finding ways to cope. New technology will develop materials to better insulate homes against extreme heat and wildfires as temperatures rise. Free markets will meet the challenges that climate change poses to agriculture—from genetically modified organisms to more-effective water desalination.Advanced digital technology, artificial general intelligence and whatever comes after, will tackle some of the most vexing issues in daily life, including increasingly personalized and customized education and medical care. New technologies will enable people to live longer and better and enjoy improved food and unimaginable entertainment. As advanced technology takes over boring and arduous work, humans will work less—unless they don’t want to. Capitalism will provide the technology, entrepreneurs, funding and skilled workers to cope with new challenges.What can go wrong? Plenty. But if it does, don’t blame capitalism.

Joel Mokyr is the Robert H. Strotz Professor of Arts and Sciences and professor of economics and history at Northwestern University.

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