Douglas Rae and Ian Shapiro on Capitalism and the Financial Crisis

In a new course that debuted in fall 2011, Yale SOM students heard from experts from across Yale as well as outside business practitioners as they sought to understand the relationship between capitalism and government, with a particular emphasis on the upheavals of the financial crisis.

The course, called "Capitalism as a Political Order," was co-taught by Yale SOM's Douglas Rae, Richard S. Ely Professor of Management and professor of political science, and his longtime Yale colleague Ian Shapiro, Sterling Professor of Political Science.

Over 14 weeks, the course examined interactions between business and governments throughout the history of capitalism. It ranged across the disciplines and included both managerial perspectives and academic ones. Among the visitors was Paolo Zannoni, the chairman of Goldman Sachs' Italian investment banking business and a former Yale political science graduate student, who spent three weeks with the class. Faculty who participated included economist John Geanakoplos, whose work on the role of leverage in the financial crisis has received wide attention, and Yale-trained political scientist Timothy Pachirat, now at the New School, who went undercover in a meatpacking plant in order to examine the relationship between business and regulators.

The 25 students in the class also brought a variety of perspectives. About a third were SOM students, with the remainder coming from Yale College and the master's degree program in international relations.