Elite Networks: The Hidden Driver of Inequality? w/ Vuk Vukovic - EP263

Economics Explored

Dr Vuk Vukovic, economist and founder of Oraclum Capital, joins Gene Tunny to discuss elite networks, their economic impact, and the future of democracy. Delving into his research, Dr Vukovic examines how political connections affect income inequality and corporate success. He shares his innovative Bayesian approach to predicting financial and political trends, offering a glimpse into his hedge fund’s methods. The episode also tackles the dangers of centralized political power and explores solutions for empowering communities and fostering trust in democratic institutions.

If you have any questions, comments, or suggestions for Gene, please email him at [email protected].

About this episode’s guest Dr Vuk Vukovic

In brief: an academic and practitioner

​Academic...

• Oxford PhD, LSE Masters, Harvard, Berkeley
• 5-year university teaching experience
• Published in top journals, published a book (@Oxford University Press) => Elite Networks
• Expert member of Parliament committee

Practitioner...

• Running a hedge fund in NYC, Oraclum Capital (ORCA), based on our scientific innovation in network theory
• Before that, founded two companies: market research consultancy & boutique rating agency
• Macro-based trader & investor for over 10 years (learning by doing: lots of mistakes, lots of helpful lessons).

Timestamps

• 0:00 - Gene introduces Vuk and his work on elite networks and Bayesian analysis
• 3:54 - Vuk explains how they use social network analysis to identify "super forecasters"
• 7:47 - Vuk discusses the performance of his hedge fund Oraclum Capital
• 9:29 - Vuk goes into more detail on their social network survey approach
• 12:54 - Gene and Vuk discuss Vuk’s thesis on how political connections contribute to inequality
• 20:21 - Discussion of Lina Khan and potential risks of Trump-Musk connections
• 25:02 - Vuk discusses how corruption and concentrated power can lead to poor economic outcomes
• 33:30 - Vuk outlines recommendations for decentralizing political power and re-empowering citizens
• 39:13 - Vuk's final thoughts on the role of elites and the need for system design to channel their influence positively

Takeaways

1. Elite Networks Drive Inequality: Dr Vukovic’s research shows that corporate executives with political connections earn significantly higher salaries, fueling income inequality.
2. Bayesian Analysis Enhances Forecasting: Dr Vukovic argues his approach improves financial and political predictions by weighting opinions based on network diversity and historical accuracy.
3. Centralization vs. Decentralization: Dr. Vukovic argues for reducing centralized political power to lower inequality and enhance democratic processes.
4. Democracy’s Resilience: While acknowledging current challenges, Dr Vukovic remains optimistic about democracy’s ability to adapt through trial and error.

Links relevant to the conversation

Info on Dr Vuk Vukovic:

https://www.vukvukovic.org/

Elite Networks book:

https://www.amazon.com.au/Elite-Networks-Political-Economy-Inequality/dp/0197774237

Oraclum Capital:

https://oraclumcapital.com/

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Full transcripts are available a few days after the episode is first published at www.economicsexplored.com.