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CAPITALISM WITHOUT CAPITAL

THE RISE OF THE INTANGIBLE ECONOMY

An economics degree isn’t required to follow the authors’ nuanced argument, but it would surely help. Recommended reading...

A searching, technical examination of the arrival of a kind of economy in which much of what is produced is abstract, symbolic, and speculative.

The economies of old, write London-based economists Haskel and Westlake, were founded on things that were actually manufactured and grown. Even if “the idea that the economy might come to depend on things that were immaterial was an old one,” the actual fact of such an economy has eluded precise description. For example, we lack the ability to measure certain aspects of a company such as Microsoft, whose market value a decade ago was $250 billion, but its physical basis—the value of its properties and equipment—was only about 1 percent of that. The “shift to intangible investment” has widespread consequences: it plays out in long-term inequality, infrastructure development, taxation, and other areas. It furthers what the authors call “secular stagnation” by allowing scalable firms to emerge that engulf and overpower competitors, as opposed to enhancing an economy based on the “spillover effects” of a high tide that raises all boats. The authors examine some interesting sociological points along the way—for one, that supporters of Brexit and other populist movements “score low on tests for the psychological trait of openness to experience,” such openness being key to symbolic analysis of the sort that advanced, intangible economies rely on. However, for the most part, their argument is based on hard economic data and trends, such as companies’ buying back stock in order to become private again, which allows them to operate without the same transparency required of public operations. In a closed economy, investing becomes more challenging, as does corporate financing; the authors examine trends in that direction as well.

An economics degree isn’t required to follow the authors’ nuanced argument, but it would surely help. Recommended reading for venture capitalists and investment counselors.

Pub Date: Dec. 1, 2017

ISBN: 978-0-691-17503-4

Page Count: 288

Publisher: Princeton Univ.

Review Posted Online: Oct. 1, 2017

Kirkus Reviews Issue: Oct. 15, 2017

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THINKING, FAST AND SLOW

Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our...

A psychologist and Nobel Prize winner summarizes and synthesizes the recent decades of research on intuition and systematic thinking.

The author of several scholarly texts, Kahneman (Emeritus Psychology and Public Affairs/Princeton Univ.) now offers general readers not just the findings of psychological research but also a better understanding of how research questions arise and how scholars systematically frame and answer them. He begins with the distinction between System 1 and System 2 mental operations, the former referring to quick, automatic thought, the latter to more effortful, overt thinking. We rely heavily, writes, on System 1, resorting to the higher-energy System 2 only when we need or want to. Kahneman continually refers to System 2 as “lazy”: We don’t want to think rigorously about something. The author then explores the nuances of our two-system minds, showing how they perform in various situations. Psychological experiments have repeatedly revealed that our intuitions are generally wrong, that our assessments are based on biases and that our System 1 hates doubt and despises ambiguity. Kahneman largely avoids jargon; when he does use some (“heuristics,” for example), he argues that such terms really ought to join our everyday vocabulary. He reviews many fundamental concepts in psychology and statistics (regression to the mean, the narrative fallacy, the optimistic bias), showing how they relate to his overall concerns about how we think and why we make the decisions that we do. Some of the later chapters (dealing with risk-taking and statistics and probabilities) are denser than others (some readers may resent such demands on System 2!), but the passages that deal with the economic and political implications of the research are gripping.

Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our minds.

Pub Date: Nov. 1, 2011

ISBN: 978-0-374-27563-1

Page Count: 512

Publisher: Farrar, Straus and Giroux

Review Posted Online: Sept. 3, 2011

Kirkus Reviews Issue: Sept. 15, 2011

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REIMAGINING CAPITALISM IN A WORLD ON FIRE

A readable, persuasive argument that our ways of doing business will have to change if we are to prosper—or even survive.

A well-constructed critique of an economic system that, by the author’s account, is a driver of the world’s destruction.

Harvard Business School professor Henderson vigorously questions the bromide that “management’s only duty is to maximize shareholder value,” a notion advanced by Milton Friedman and accepted uncritically in business schools ever since. By that logic, writes the author, there is no reason why corporations should not fish out the oceans, raise drug prices, militate against public education (since it costs tax money), and otherwise behave ruinously and anti-socially. Many do, even though an alternative theory of business organization argues that corporations and society should enjoy a symbiotic relationship of mutual benefit, which includes corporate investment in what economists call public goods. Given that the history of humankind is “the story of our increasing ability to cooperate at larger and larger scales,” one would hope that in the face of environmental degradation and other threats, we might adopt the symbiotic model rather than the winner-take-all one. Problems abound, of course, including that of the “free rider,” the corporation that takes the benefits from collaborative agreements but does none of the work. Henderson examines case studies such as a large food company that emphasized environmentally responsible production and in turn built “purpose-led, sustainable living brands” and otherwise led the way in increasing shareholder value by reducing risk while building demand. The author argues that the “short-termism” that dominates corporate thinking needs to be adjusted to a longer view even though the larger problem might be better characterized as “failure of information.” Henderson closes with a set of prescriptions for bringing a more equitable economics to the personal level, one that, among other things, asks us to step outside routine—eat less meat, drive less—and become active in forcing corporations (and politicians) to be better citizens.

A readable, persuasive argument that our ways of doing business will have to change if we are to prosper—or even survive.

Pub Date: May 1, 2020

ISBN: 978-1-5417-3015-1

Page Count: 336

Publisher: PublicAffairs

Review Posted Online: Feb. 16, 2020

Kirkus Reviews Issue: March 15, 2020

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