Amid the current economic slowdown there is renewed interest in what type of capitalism fosters growth and best improves welfare. This column argues Nordic-style capitalism may provide higher welfare but in an interconnected world, it may be the cut-throat US capitalism, with its extant inequalities, that makes possible the existence of more cuddly Nordic societies.

Politicians who rail against socialism or capitalism always adopt a more moderate stance after they come into office. This column argues this is because we are still experiencing the consequences of the industrial revolution. The current state of that process involves a widely accepted compromise between aggregate prosperity and distributional equality.

Twenty years ago, communist countries began their shift towards capitalism. What do we know now that we didn’t know then? Harvard's Andrei Shleifer, the Russian-born, American-trained economist, provides his answers and their relevance for contemporary policymakers.