Inflation is the phenomenon right now, however you believe it comes about. Looking beyond present obsessions to the long term is Viktor Shvets, head of Global and Asia-Pacific Strategy at Macquarie Capital and author of "The Great Rupture: Three Empires, Four Turning Points, and the Future of Humanity." Shvets joins Alfonso Peccatiello, author of The Macro Compass newsletter, to talk about the bridge we’re crossing from an era defined by liberal capitalism but marked with multiple asset bubbles to a model driven by government. Fiscal policy emerged as a primary economic driver during the COVID-19 pandemic. Within a decade or so, posits Shvets, the state rather than the private sector could command capital allocation. Shvets contends that public debt is irrelevant, as it will never be paid off. And, because the west faces gathering disinflationary forces, political leaders will gravitate toward China-style state capitalism. The key to understanding Shvets’ analysis is the concept of the “R-star,” or the natural rate of interest. He raises a compelling question: Must we be free to be prosperous? Recorded on February 10, 2022.