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Hardcover
Publisher: Yale University Press
Imagine this: a mere century ago, the purchasing power of an average American was one-tenth of what it is today. But what will it take to sustain that growth through the next century? And what can be said about economic growth to aspiring nations seeking higher standards of living for their citizens?
In this important book, William J. Baumol, Robert E. Litan, and Carl J. Schramm contend that the answers to these questions lie within capitalist economies, though many observers make the mistake of believing that “capitalism” is of a single kind. Writing in an accessible style, the authors dispel that myth, documenting four different varieties of capitalism, some “Good” and some “Bad” for growth. The authors identify the conditions that characterize Good Capitalism—the right blend of entrepreneurial and established firms, which can vary among countries—as well as the features of Bad Capitalism. They examine how countries catching up to the United States can move faster toward the economic frontier, while laying out the need for the United States itself to stick to and reinforce the recipe for growth that has enabled it to be the leading economic force in the world. This pathbreaking book is a must read for anyone who cares about global growth and how to ensure America’s economic future.
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| Baumol on Capitalism |
| Customer Rating: 3 out of 5 |
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This book is a description of the different ways in which advanced and emerging economies include the concepts of capitalism in their policies. There is really nothing new in it, but it is a convenient guide to economic policies in the selected countries. Lacking is a description of Classical capitalism, which would permit the reader to assess the aberrations adopted by each country.
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| Better View of Capitalism |
| Customer Rating: 4 out of 5 |
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Good Capitalism Bad Capitalism is an excellent book which provided the beginner economic student with an open and informative view of capitalism.
The body of the book presented the reader with a view of capitalism, which enabled one to better understand what is needed to succeed in the American economy today.
I would highly recommned this book to anyone interested in learning more about capitalism and economics.
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| Good, Not Bad |
| Customer Rating: 3 out of 5 |
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This book makes a persuasive argument why "entrepreneurial" capitalism yields faster growth than "big-company" capitalism. For the true believers, it doesn't contribute much to the debate, but if you haven't read a textbook on the economics of growth, it provides a concise summary of the many factors affecting growth.
The core of the book argues that Europe and Japan focused on big-company capitalism after WWII as a logical way to rebuild their war-torn economies and as a result, this form of capital still dominates these economies. It also postulates that cultures can likely be changed over the medium term (ten-ish years, perhaps). This leaves unaddressed the question why then haven't European and Japanese cultures evolved into faster growing "entrepreneurial" capitalism as the US appears to have over the last 15 years. (Prior to that, all three economies were growing at similar growth rates; if anything the US was growing slightly slower as the other economies caught up.)
I suspect the reasons are threefold. First, IT opened up a target rich investment environment. Second, both Europe and Japan face high costs to redeploy workers from old sectors of the economy to new growing sectors. The opportunity cost of leaving resources employed suboptimally (and the productive thinkers who guide them) significantly holds back these economies. Third, more equal income distribution substantially reduces risk taking as the propensity to save and invest grows significantly with income. The first dollars of savings are used primarily for housing (really a consumer good), then safe (big-company) financial investments (to stockpile for retirement) and lastly to underwrite entrepreneurial risk. As a result, the real cost of redistribution is its toll on risk-taking. By and large, only the very rich can afford to underwrite/finance the latter. These factors are given short shift by the book.
In fact, the book argues for more equal distribution while ignoring the very different but critically important causes of unequal distribution - economically misguided oligarchs who misappropriate it vs. successful entrepreneurs who rightly earn it. The book devotes all of 2 pages to taxation.
(My guess is that there are also positive feedback loops at work culturally where success causes others to desire success which in turn leads to a culture that embraces (business) success rather than shunning/criticizing it. And where critical masses of creative cutting-edge thinkers yield real synergies.)
In my opinion then, the book comes up short. It identifies the fact that entrepreneurial capitalism is desirable; but its prescriptions for how to achieve and sustain it are not very profound. Only a comparison to Europe and Japan that reveals why these cultures haven't evolved toward higher growth, like the US, can reveal the truth. Most of the prescriptions, such as protecting intellectual property, enforcing anti-trust laws, reigning in unmeritorious litigation, etc. are largely identical between the 3 societies and hardly "ground breaking."
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| The Beginners Economic Guide |
| Customer Rating: 4 out of 5 |
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Good Capitalism, Bad Capitalism offers a very informative and easy to read approach to economics. I have a much broader understanding of economics after reading this book. It was interesting and the authors' are incredibly thorough at describing the various aspects of economics. As a person who had a very minimal understanding of the economic world this book provided the basics. I can now appreciate the issues that are faced in the economic arena. I am able to state my opinion relating to economic issues with confidence now. This book offers a nice transition into the world of economics. It is painless and interesting. I highly recommend it to anyone who needs to learn the basics.
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| Very interesting book |
| Customer Rating: 4 out of 5 |
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I thought that this book was an interesting take on how government policy can promote or hinder economic growth. I like how they combine together developed countries with undeveloped countries (although there is far more focus on the former). Most books on this subject focus exclusively on the one or the other.
Others have summarized the book well, so I will cover only a few points. I like how they show that there is not one type of capitalism, but many. I would have liked it if they broke down the State-Guided Capitalism a bit more. It seems to me to be a little broad a generalization to lump Japan, Denmark, France, Greece and Poland all into the same category.
A little more analysis of the Oligarchic capitalism would also be nice. It is not clear to me what metric was used to show that economic wealth was concentrated in the hands of a few and that government policy is only for their benefit. Some people claim that USA and Japan also have that problem, so how do we differentiate.
And their focus on USA as the form of entrepreneurial capitalism (mixed with big corporation) makes the book a bit lopsided. It is not clear that there are really other nations in that category, so how do you know how much of it is American culture and how much is institutions.
What I like best about this book is how they offer different perscriptions for different countries based on their category. And they also tailor their advise to reform around the margins and to avoid taking on powerful interests with radical reform.
Overall, I would recommend this book.
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