Saving Capitalism from the Capitalists: How Open Financial Markets Challenge the Establishment and Spread Prosperity to Rich and Poor Alike
Capitalism’s biggest problem is the executive in pinstripes who extols the virtues of competitive markets with every breath while attempting to extinguish them with every action.
Saving Capitalism from the Capitalists is a groundbreaking book that will radically change our understanding of the capitalist system, particularly the role of financial markets. They are the catalyst for inspiring human ingenuity and spreading prosperity. The perception of many, especially in the wake of never-ending corporate scandals, is that financial markets are parasitic institutions that feed off the blood, sweat, and tears of the rest of us. The reality is far different.
•Vibrant financial markets threaten the sclerotic corporate establishment and increase corporate mobility and opportunity. They are the reason why entrepreneurship flourishes and companies like The Home Depot and Wal-Mart—mere fly specks a quarter of a century ago—have surged as they have.
•They mean personal freedom and economic development for more people. Throughout history, and in most of the world today, the record is one of financial oppression. Elites restrict access to capital and severely limit not only general economic development but that of individuals as well.
•Open borders help check the political and economic elites and preserve competitive markets. The greatest danger of the antiglobalization movement is that it will keep the rich rich and the poor poor. Globalization forces countries to do what is necessary to make their economies productive, not what is best for incumbent elites. Open borders limit the ability of domestic politics to close down competition and to retard financial and economic growth.
•Markets are especially susceptible in economic downturns when the establishment can exploit public anger to restrict competition and access to capital. While markets must be free to practice “creative destruction,” Rajan and Zingales demonstrate the political and economic importance of a sustainable distribution of wealth and a baseline safety net. Capitalism needs a heart for its own good!
There are no iron laws of economics that condemn countries like Bangladesh to perpetual poverty or the United States to perpetual prosperity. The early years of the twentieth century saw vibrant, open financial markets that were creating widespread prosperity. Then came the “Great Reversal” during the Great Depression. It can—and will—happen again, unless there is greater understanding of what markets do, who benefits, and who really wants to either limit them or shut them down.
Saving Capitalism from the Capitalists breaks free of traditional ideological arguments of the right and left and points to a new way of understanding and spreading the extraordinary wealth-generating capabilities of capitalism.
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We start with two examples, the first from a country where financial markets do not exist, and the second from a ... Yet, as our first example suggests, the poor may be totally incapacitated when they do not have access to finance.
To see this, we move to California for our second example. The Search Fund Kevin Taweel, who was about to graduate from Stanford Business School, was not excited by the idea of going to work for a large, traditional corporation.
For example, among the countries of the New World, land in Canada and the northern United States was widely distributed, with a sizable number of "yeoman" farmers managing moderate plots of land. In the countries of the Caribbean and in ...
The only way for these estates to remain profitable was for the owners to ensure that the working population had few other economic opportunities—for example, by ensuring that they were starved of education and finance.m Far from ...
For example, in Japan in the early 1980s, corporate bond markets were tiny. This was because commercial banks controlled the so-called Bond Committee, an official body to which each firm desiring to issue unsecured bonds (bonds that are ...
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Saving capitalism from the capitalists: unleashing the power of financial markets to create walth and spread opportunityUser Review - Not Available - Book Verdict
Given the downfall of such corporate giants as Enron and Worldcom, other white-collar malfeasance, and today's bearish stock-market conditions, it may not seem like such a great time for capitalism ... Read full review
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Saving Capitalism from the Capitalists
About the Authors
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Saving Capitalism from the Capitalists: Unleashing the Power of Financial ...
Raghuram Rajan,Luigi Zingales
No preview available - 2003