AEI This Week

AEI's weekly digest of top commentary and scholarship on the issues that matter most

CAPITALISM AND HUMAN FLOURISHING

Is Affluence a Barrier to Living Well?

February 7, 2026

The United States is more prosperous than any nation in human history—but this very success has attracted critics from the left and the right who blame it for eroding moral and social bonds. In a new essay, AEI Economic Policy Studies Director Michael R. Strain debunks the idea that contemporary capitalism has made human flourishing more difficult.

In fact, new research from AEI scholars underlines how effective market forces have been at ending poverty in the United States. In a National Bureau of Economic Research working paper, Richard Burkhauser and new Daniel C. Searle Chair Kevin Corinth create a historical income methodology that reveals massive reductions in absolute poverty since 1939—and the limited credit the Great Society deserves for this achievement.

Rather than attacking capitalism, if we want to address dissatisfaction with American life today, the best place to start is education—which has systematically excluded important moral and political perspectives, especially from conservatives. Codirectors of AEI’s Center for the Future of the American University and new Ravenel Curry Chairs in Civic Thought Benjamin Storey and Jenna Silber Storey offer five reasons universities should advance viewpoint diversity to address this failure.

President Trump’s ambition to subordinate the executive branch to his personal will has drawn comparisons with Franklin D. Roosevelt—ones Trump has openly invited. Evaluating these two presidents in The New York Times, constitutional scholars Jack Goldsmith and Samuel Moyn observe that Trump, unlike Roosevelt, has disdained working through Congress—severely limiting the efficacy and lasting impact of his actions.

The United States’ ousting of Venezuelan President Nicolás Maduro was a potent reminder that the US is the only great power with an unchallenged sphere of influence. In analysis for Foreign Affairs, Michael Beckley argues that rather than retreat into a defensive position, US policymakers need to realize that our strength in the Western Hemisphere gives us a unique ability to project power against our authoritarian rivals.

International Currency Dominance

For decades, the US dollar has sat at the center of the global financial system, but geopolitical shifts and the US embrace of protectionism have raised questions about its preeminence. In a new working paper, Jesús Fernández-Villaverde and coauthors present a monetary model of the world economy to study how international currencies compete for dominance. They argue that the dollar’s status as the international reserve currency persists not just because of US economic strength but also because potent network effects make dominant currencies hard to displace even when economic fundamentals shift. Through counterfactual experiments, they argue that the Trump administration’s trade war is unlikely to undermine the dollar’s status. Nevertheless, the authors highlight the danger of Chinese policies that could increase the renminbi’s share of international reserves.