Simple rules for a more inclusive economy

Abstract

This paper explores some of the reasons why capitalism experiences periodic crises of legitimacy and asks whether Richard Epstein’s “simple rules” heuristic can help. The current legitimacy problem is exacerbated by the fact that we are also in a low growth situation. This means that some policy instruments that could have been used to increase legitimacy may no longer be available. The “simple rules” heuristic can help as a guide to reforms that would simultaneously address the legitimacy problem, while avoiding making the growth problem worse.