Jeffrey Sachs: Markets can only do certain things. They cannot ensure fairness. They cannot help the poorest of the poor. They cannot save the environment, or provide for modern infrastructure. But America has forgotten that in the last 36 years. We’ve been on one long privatization jaunt. The result is an economy that is quite rich but quite unequal, with decrepit infrastructure. The problem is not a shortage of technology but a shortage of common action.

Thompson: That is one of the book’s largest themes. The U.S. doesn’t suffer from scarcity, but rather from the unequal distribution of its abundance. So, there is little in the U.S. economy that cannot be fixed by more taxes, more planning, more spending, and more redistribution. But do any voters really want to hear that message?

Sachs: Millennials do. Bernie Sanders’ campaign showed that a message of economic redistribution can work. Words that used to be horrifying in the American political context, like socialism and social democracy, are commonplace among Millennials. They say government should have a larger role in health care and climate change. So I think the tide is turning.

But back in the 1960s, you wouldn’t have supposed there was too much difference between the social democracies of northern Europe and the U.S. under Kennedy and Johnson. The real divergence took place in the 1970s and in the 1980s. The northern European countries and Canada passed value-added taxation to increase the overall size of government with a focus on universal services like health care and child support. But Ronald Reagan, who was the single most important definer of our politics, told Americans that government was the problem and that began a non-stop period of tax cuts. Both parties have basically been in tax-cutting mode since 1981.

Thompson: I’m curious why you think Americans are against social welfare more than Europeans. I think some might argue that it all comes down to racism in the U.S., where white voters consistently reject programs that seem to help minorities. I also wonder whether the World Wars made Europe more receptive to socialism than the U.S., which jailed socialists and waged a cold war against communism while leftists gained influence throughout Europe. Finally, in the U.S., I think you have this hypnotizing effect of the American Dream, which passes down the lesson that all success is earned. That hurts the case for welfare.

Sachs: America’s social fabric is different because of diversity and race. A former doctoral student of mine, the economist Alberto Alesina, has made lots of points along your lines.

Thompson: To be honest, I was just paraphrasing Alesina there.

Sachs: Yes, he has done wonderful work showing that in places where there is a higher African American population, there is less support for public goods. After the war on poverty, you had the Civil Rights Act and changes in the immigration code, which led to the Southern strategy, white identity politics, and a backlash to the civil rights movement.