good. Assesses what works and is broken about the capitalist system. Emphasizes the financial aspects of capitalism, especially capital markets. Explores dangers to the financial system and what has in the past and could in the future cause governments to restrict or otherwise damage them. The authors, two University of Chicago Business School Finance professors, are good at presenting evidence and stories from around the world, not just the United States, though they pay most of their attention to the U.S., Britain, Italy, Germany, Japan and France. The book has a lot of interesting history of markets and financial systems, with some of it going back to the Middle Ages.
The book's perspective on the Great Depression is interesting. It emphasizes the US's structural changes to protect incumbent firms and limit competition, for example in trucking, rather than government efforts to increase demand. It implicitly criticizes the Glass-Steagall Act for unnecessarily restricting commercial banks from underwriting securities, though the early 21st century has shown that such separation does actually seem to avoid conflicts of interest.
Saving Capitalism has some downsides. One is how it can say downright obvious things sometimes. For example, it talks about how people, during tough economic times, may riot or demand changes to the system. Duh! The book complains a few times about regulations that restrict initial public offerings in equity markets, particularly new firms. While it is desirable to provide capital to outfits that can use it most efficiently, some rules are useful, and, even some that hurt are not so terrible as to be worth stressing in a book of this scope.
The title, Saving Capitalism From the Capitalists, is inaccurate. The book is mostly a history of capitalism and financial markets, along with a litany of things that have gone wrong. It warns against repeating prior mistakes. Only in the concluding chapter does it offer suggestions to save our capitalist system against any capitalists who are hurting it. These bad capitalists are entrenched people who have, in the past, tried to avoid competitive capital markets and free trade, in order to protect themselves from competition. Good proposals include stengthening shareholders against corporate management, strengthening antitrust law, modifying inheritance taxes to discourage estates from passing control to inheritors, and providing health care to children.
Overall, Saving Capitalism is a good read. The authors make their points succintly, drawing on a wide variety of examples that are easy to follow. |
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