Capitalism's Toxic Assumptions: Redefining Next Generation Economics

by Eve Poole

In Science, no-one believes the earth is flat any more. Economists, on the other hand, haven't budged from their original worldview. Market Capitalism depends on seven big competition, the 'invisible hand', utility, agency theory, pricing, shareholder value, and limited liability. These served the world well in the past, but over the years they have become cancerous, and are slowly killing the system as a whole. Eve Poole argues that if you zoom in on any of these firm foundations, they start to blur and wobble. Here she offers alternative views for a healthier system. And looking at them together, it becomes clear why we're so stuck. The capitalist system masquerades as a machine programmed by experts, with only Economists and Governments qualified to tinker with it. But the market is just a mass of messages about supply and demand. The rich world shapes the market in its image, because it has more 'votes'. So if we want to change the way things are, we don't need to wait for the experts, we can start now. In each chapter, Poole shows how quiet action by consumers, investors, employees and employers can make big changes, by shifting behaviours and adjusting the way financial 'votes' are cast in the market.

Genres: Economics, Finance, Politics, Audiobook

208 pages, Hardcover

First published March 12, 2015

Reviews

[Titus Hjelm · Rating 2 out of 5]

It seems that critiques of neoliberalism (and anti-capitalist ciritiques, which this is not) fall into two categories: those who look at the premises of a functioning economy, and those who look at the consequences of economic systems. The former tend to use science (evolutionary psychology especially), the latter social science (economics, sociology) to support their arguments. Poole's book is clearly in the former camp. It is indeed a bit confusing what the purpose of the book is. It is clearly not a critique of capitalism as such. At times it seems that she wants to save capitalism from itself. Certainly she doesn't discuss key issues such as what is the fate of actual humans in an economic system that is premised on inequality and exploitation. A further problem is that the attempt at science leads to sloppy essentialisms ('human nature', anyone?) and reifications (men are from Mars, etc.). While often engagingly written, I don't see why anyone should pick this up over Piketty's Capital in the 21st Century (except page count perhaps) or a host of properly critical work, like David Harvey's. Finally, I don't know what Bloomsbury was thinking when they designed the cover. It has 'cheap' written all over it.

[Mark Oppenlander · Rating 4 out of 5]

In this short and easy to read book, Eve Poole tackles the underlying assumptions of capitalism, suggesting that many of the commonplaces which economists take for granted are, at best, partial truths. She scrutinizes the concepts of competition, agency theory, utility, limited liability, and several more. In each chapter, she explains the basic economic concept under discussion, and then challenges the assumptions upon which that concept is built. She offers evidence as to why the assumption may prove "toxic" in application, along with counter-evidence in the form of real-world examples and academic research.

I've read some of the complaints from other readers, and while I understand that this book may feel incomplete to some, I think those readers may have been looking for something Poole never intended to write. Although Poole holds both an MBA and a PhD in Divinity, this is not, at its heart, a scholarly book. Instead, it feels like a distillation of other scholarly work, designed for a broader audience. I sense that Poole was trying to simplify some concepts to make them accessible for the general public. It is a warning cry to the masses who accept the "wisdom" of economists, business experts, and policy makers without question. As a highly educated woman who has worked both in business and the so-called "social sector," Poole has particular insight into the clash of ideas of which she writes, and a very particular point of view on what is wrong with traditional assumptions about capitalism.

To be clear, Poole doesn't seem ready to throw the baby out with the bathwater. Instead, she finishes the book with a handful of suggestions for ways in which capitalism could be modified or constrained to veer away from the worst outcomes of the toxic assumptions. She seems quite fond of the idea of employee-owned companies, for example, as a way to democratize decision making and move toward more just economic outcomes.

There are undoubtedly longer, more heavily researched, and more virulent screes against capitalism available for consumption (no pun intended). However, this volume covers a lot of ground in under 200 pages; for anyone looking to understand the ideological battle for the soul of free-market economies, this book may be an excellent primer. You may not agree with Dr. Poole's conclusions, but she will almost certainly shatter your confidence in the proclamations of economic pundits who uncritically pronounce capitalism good.

[James Uscroft · Rating 4 out of 5]

While I originally shared the same opinion of others who've described this book as 'Missing Something' and was planning to describe it myself as a 'Criticism Without A Cause,' that all changed during the conclusion when Ms. Poole laid out what Employee Owned Companies can, and in some cases, may already look like, and called upon us to look at our own actions and ask ourselves what we are doing to change the current 'Profit At Any Cost' paradigm. Because indeed, as she points out at the very end of her book, simply calling out these seven Toxic assumptions such as 'The Invisible Hand' which are the basis of Conservative/Republican/Neo-Liberal dogma can help to change the world and perhaps ultimately 'Save' (?) Capitalism. Or if not save it, then pave the way for something that isn't so exploitative and destructive.

But leaving aside its broader aims and impact though, speaking as someone who has no understanding of economics, this was a relatively clear and accessible introduction which, while lacking depth as some other have complained, does exactly what it says on the tin; identifying 7 core assumptions first proposed by Adam Smith which are accepted as dogma even to this very day, in defiance of all of the evidence to the contrary.

Speaking of 'Evidence' of course, while I did roll my eyes at Ms. Poole's grossly reductionist claims regarding female vs. male physiology and their affect on decision making, the fact that she acknowledged how we aren't slaves to our biology, coupled with the fact that whether it's rooted in biology or culture doesn't affect what she's saying allows me to overlook it. So in conclusion then, I highly recommend this book to everyone who, like me, knows that something is deeply wrong with the way that the world is being run now and wants to know what we can do about it.

[Rajesh Iyer · Rating 5 out of 5]

I cannot think of a better book that demystifies capitalism and exposes it for all its flawed assumptions. The simplicity of language used to not only explain capitalism but also its flaws is a breath of fresh air. Any book that doesn’t make you reach out to your mobile frequently to check the meaning to a word you haven’t come across is proof of the high quality of language and simplicity. The author Eve Poole has done a fantastic job and thank God she did not go to Harvard or any other “famous” business school or else it would take you a lot longer to just understand what underpins capitalism; let alone its flaws. Do read this and you will better understand the root causes of the growing income inequality across the world.

[Ailith Twinning · Rating 3 out of 5]

It's kinda worth reading? I don't regret it, I didn't put it down, and it isn't just generally bad in any specific way. It's just missing something. . .it's quite broad, it makes a few fiat assumptions, and just generally while I can agree with the basis of the problems, I'm ambivalent about the. . .oh just read it for yourself man, I'm ambivalent.

EDIT: Still ambivalent. There's the typical myopia, ignoring modern imperialism, but I think the broadest problem is that the discussion isn't about actual centers of power, international conglomerates. These actors are more powerful than most nations - and they get mention, but the global reach of their effects, how their businesses actually run, and so on: This book discusses an idea of corporations, but it doesn't dirty itself with reality. The arguments are ultimately just an update to economic theory; it's not actually bringing economics from sophistry into anything like a social science.

Edit Again: Right, my actual problem with this is that it is pro-Capitalist. I am a lot less ambivalent about that stance these days.

[Aarif Billah · Rating 5 out of 5]

My book review on Eve Poole’s Capitalism’s Toxic Assumption, redefining next generation economics.

Classical assumptions on competition, pricing mechanism, and other elements of capitalism find little support among modern theories of market economics. For example, game theory emphasized the importance of cooperation and undermines the old theory that competition is always the best business strategy.
.
take a look at my reading note here (https://aarifbillah.com/capitalisms-t...)

Best regards,
https://aarifbillah.com/

[Anthony Faber · Rating 4 out of 5]

A good critique of how economists' assumptions don't seem to be correct and how that is messing the world up.

[Melinda · Rating 4 out of 5]

Very interesting. Fascinating take on how economics has changed/not changed. What we should do about that. Lots of good ideas...perhaps slightly utopian but well thought out.

[Tai Odunsi · Rating 5 out of 5]

actually a great book for business, behavioral economics, and social science