What Went Wrong with Capitalism (Unabridged)
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3.8 • 6 Ratings
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- $19.99
Publisher Description
Named a Best Book of 2024 by The Wall Street Journal and Financial Times
An “eye-opening” (The New York Times), “absolutely fascinating” (Fareed Zakaria, CNN host and commentator) look at a how a century of expanding government has distorted financial markets, stoked massive inequality, and soaked America in debt.
Capitalism didn’t fail, it was ruined…
What went wrong with capitalism? Ruchir Sharma’s account is not like any you will have heard before. He says progressives are right, in part, when they mock modern capitalism as “socialism for the rich.” For a century, governments have expanded in just about every measurable dimension, from spending to regulation and the scale of financial rescues when the economy wobbles. The result is expensive state guarantees for everyone—bailouts for the rich, entitlements for the middle class, welfare for the poor.
Taking you back to the 19th century, Sharma shows how completely the reflexes of government have changed: from hands-off to hands-on, from doing too little to help anyone in hard times to today trying to prevent anyone suffering any economic pain, ever. Trading sins of omission and indifference for excesses of spending and meddling, governments from the United States to Europe and Japan have pumped so much money into their economies that financial markets can no longer invest all that capital efficiently.
Inadvertently, they have fueled the rise of monopolies, “zombie” firms, and billionaires. They have made capitalism less fair and less efficient, which is slowing economic growth and fueling popular anger. The first step to a cure is a correct diagnosis of the problem. Capitalism has been badly distorted by constant government intervention and the relentless spread of a bailout culture. Building an even bigger state will only double down on what ruined capitalism in the first place.
What Went Wrong with Capitalism is a “superbly written” (The Wall Street Journal), “fresh and accessible” (Robert Rubin, former Secretary of the Treasury and chairman of Citigroup) look at the issues confronting our capitalistic society and will ultimately reshape how you think about world.
Customer Reviews
Long in diagnosis, short on cure
Overall, this is a well researched, well argued analysis of how capitalism is underperforming today. Too much debt and deficit spending (even when the economy is growing), artificially low interest rates, cumbersome regulations that favor large incumbents, an unwillingness to make the hard calls on failed companies; in short, capitalism is no longer delivering strong growth because creative destruction is not allowed to occur.
These arguments are well presented and make sense when you read them. The author’s voice is noticeably absent in most modern discussions of economics and politics, so it’s good to hear this perspective. He even provides some examples of who’s doing it right - Switzerland, Taiwan and Vietnam.
Where the book falls down is around what could be practically done to get closer to the kind of capitalism he envisions. The hard part being that for creative destruction to lead to better things in the future, you have to deal with the destruction part today. This is why the tendency has been to keep kicking the can down the road. Anyone who would be responsible for enacting this agenda would be severely punished, and the pendulum would likely swing back the other way before the creative part kicks in. I doubt that any advanced society has the nerve to take on this kind of tough love. For example, if you thought that something like social security needed to be unwound, how would you possibly do that?
Another question is where do you draw the line? It’s clear that the author is for less government, but how small should the government be? There has to be some mechanism to provide what market forces do not.
Lastly, this analysis looks only through an economic lens. Society is more than just economics. It’s possibly that most people today actually prefer an underperforming, suboptimal form of capitalism to the harsher forces that more creative destruction would bring.
Still, at a minimum, I do wish that more of the author’s point of view were present in today’s discussions.