All Capitalism is Not Created Equal
Trailblazing book identifies a mix of types as ideal for growth
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.
Video features authors discussing book
Click image, left, to go to the Council on Foreign Relations site to see Carl Schramm and Robert Litan discuss their book Good Capitalism, Bad Capitalism and the Economics of Growth and Prosperity.
What They're Saying
"Other books influencing Mr. Gates included "The Mystery of Capital" and "Good Capitalism, Bad Capitalism and the Economics of Growth and Prosperity" and "The Bottom Billion." This reading helped inform Mr. Gates's belief that leading companies should find ways to sell to and work with the poorest."
From Wall Street Journal article Bill Gates Issues Call For Kinder Capitalism, January 24, 2008
"Good Capitalism, Bad Capitalism helpfully moves the debate on from competing national models to the underlying structures that shape the relative effectiveness of different sorts of capitalism..."
Review in The Economist, July 7, 2007
"In our lifetimes, humans passed a remarkable milestone. Most people now live in a capitalist economy. This is not, however, the end of history. As the authors of this pathbreaking book show, there are several distinctly different types of capitalism, and it takes amixture of two of these types to get all the economic, social, and political benefits that capitalism affords."
Paul M. Romer
STANCO 25 Professor of Economics
in the Graduate School of Business at Stanford University
"Good Capitalism, Bad Capitalism tells us that capitalism comes in different flavors, and some of those flavors taste very much better than others. One of these forms of capitalism, entrepreneurial capitalism, is a special treat. It leads to growth and prosperity. The other forms are to be avoided; they lead to stagnation. This new view of the wealth of nations offers a guide to economic policy in all countries, from richest to poorest. This is a daring book with big, bold, important ideas."
University of California, Berkeley
Nobel Laureate in Economics, 2001