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Good Capitalism, Bad Capitalism, and the Economics of Growth and Prosperity Paperback – October 27, 2009
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Top Customer Reviews
The first is capitalism guided by the state, otherwise known as mercantilist capitalism. This model has been favored in Asian countries, where the state controls the banks and other financial institutions. The states underwrite low wage export oriented businesses to produce goods primarily for the world market. The problem with this kind of pratice is that governments tend to overinvest in favored industries and underinvest in those needed for their domestic use. States are also notoriously slow in responding to the demands of a changing marketplace.
Secondly, there is oligarchic capitalism. This is when a wealthy elite uses the state as its personal fiefdom. This was the case of Russia shortly after the fall of the Soviet Union. However, the oligarchs are now in retreat, Putin is moving the country toward state-guided capitalism. Both of these models can work for a period of time.Read more ›
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.
Another valuable insight is that "innovative" entrepreneurs (producers of a new product or service, or creators of new methods for producing an existing product/service), not "replicative" entrepreneurs are the key to rising standards of living. Most successful economies have a mix of innovative entrepreneurs and larger, more established firms that refine and mass produce the innovators' products.
Four elements contribute to an economic growth machine. 1)A relatively easy means of forming a business; business abandonment is also easy. 2)Society rewards socially useful entrepreneurial activity. 3)Government discourages activity that aims to divide up the economic pie rather than increase its size (eg. criminal behavior; lobbying and frivolous lawsuits to transfer wealth). 4)Government ensures openness to trade, and provides effective anti-trust enforcement.
Several commonly held essentials for economic success are actually myths. For example, the existence of hard-working individuals is not sufficient - Russian and Asian immigrants do much better in the U.S., despite having been frustrated in their native land. Geography is also not the key - look at Singapore, and to a lesser extent, Thailand. (Some contend that tropical climate and diseases precludes economic success.Read more ›
Most Recent Customer Reviews
Should be read by left and right.Aslo figures in the debate vabour equality and inequalitty.SA very solid criique from which all sides can learmnPublished on May 6, 2014 by rh
Great insight as to what it takes to grow a "new" economy. Great suggestions for what could be done to stimulate future growth.Published on February 1, 2014 by yoda
The authors try to provide answer to the question: which type of capitalism is apt to deliver long-run economic growth? Read morePublished on August 2, 2013 by Koo Tat Kee
Some of the reviews note that this book is really targeted towards a particular frame of free market, GDP-growth driven economics. Read morePublished on October 28, 2012 by Marc Korman
William Baumol and his partners have written an excellent book on capitalism. The arguments and the evidence are compelling. Read morePublished on July 20, 2012 by Carlos
This book is very informative, and easy to read. For the person who is just learning social sciences, the text allows you understand and comprehend the principles of economics. Read morePublished on February 16, 2011 by Marty55
It is a must read for those interested in developing their country. I think the theoretical approach is appropriate especially for Latin American countries. Read morePublished on November 26, 2010 by Ernesto G Marin
It is said that too many cooks spoil the broth. Each one wants to add his particular flavor to the recipe, causing the end product to become tasteless. Read morePublished on October 11, 2010 by Etienne RP