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50 Capitalism Ideas You Really Need to Know
Controversial and unavoidable, it shapes our society and our lives - but what really is capitalism? Does it mean greed is good? Are inequality and poverty its inevitable consequences? Can economic growth continue forever or are constant cycles of boom and bust a foregone conclusion? Indeed is capitalism in a fatal crisis - and what, if any, are the alternatives?
From capitalism's history, core theories and key institutions to its current-day political power and social impact, this book explains everything you need to understand the world's dominant economic system. Jonathan Portes demystifes the fundamental concepts of capital, creative destruction, the market and the invisible hand; dissects the rival ideologies of socialism, liberalism and Keynesianism; predicts what capitalism means for immigration, the environment and the future of work; and much more - all in 50 concise and authoritative essays.
Here is the essential one-volume guide to its strengths and weaknesses, past and future - a future that will affect us all.
From capitalism's history, core theories and key institutions to its current-day political power and social impact, this book explains everything you need to understand the world's dominant economic system. Jonathan Portes demystifes the fundamental concepts of capital, creative destruction, the market and the invisible hand; dissects the rival ideologies of socialism, liberalism and Keynesianism; predicts what capitalism means for immigration, the environment and the future of work; and much more - all in 50 concise and authoritative essays.
Here is the essential one-volume guide to its strengths and weaknesses, past and future - a future that will affect us all.
208 pages, Kindle Edition
Published November 3, 2016
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230 people want to read
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Displaying 1 - 9 of 9 reviews
September 4, 2019
Quite basic towards the start, but really insightful towards the end. I don't know much at all about economics and would recommend it to 'beginners'. Portes' other books are probably better for those more in the know. Some of my notes:
Workers have historically received about two thirds of the total value created by the economy (the 'labour share'). Since about 2008 however, this has decreased in many countries - we don't know whether this is temporary.
Monopolies don't foster innovation or decent prices because of the lack of competition. But too much competition can have a similar effect - the lack of profit most firms make can stymie innovation (as it requires upfront investment) and therefore prevent longer term reductions in costs to consumers.
On data and internet: "if you're not paying for the product, you are the product"
'The invisible hand' - this refers to the idea that, if markets work, then individuals rationally pursuing self-interest should maximise the value of what society produces. This is because of the price mechanism (supply and demand). But the counter to this is that markets don't work at all without government intervention (to establish property rights and enforced contracts).
companies limit risk: 'while capitalism may be all about taking risks, one of the key inventions that made modern capitalism possible does so by limiting risk.'
A 'bubble' is an episode where the market prices systematically deviate from those implied by publicly available information.
Burton Malkiel: "a blindfolded monkey throwing darts at a newspaper's financial pages could select a portfolio that would do just as well as one carefully selected by experts"
It's not so much the amount of debt that matters but its distribution - who owes what to whom.
There is no evidence to suggest that the financial crisis was caused or worsened by high levels of government debt, except in the case of Greece. The exceptionally low interest rates mean financing government borrowing has never been easier in UK. Most economists think it makes obvious sense for governments to borrow more to increase public investment and boost demand, but public and political fear of increasing public debt has so far blocked this route.
A major contradiction between capitalism and democracy is the former's principle that money determines access to power and resources while the latter's principle is one person one vote. In the US elected officials spend half their time fundraising and 9/10 winning candidates had the most money of those standing. A study found that the preferences of the average American have "a miniscule, near-zero, statistically non-significant effect" on political outcomes
Nationalisation became popular after WW2. The planning was essential to reconstruction. But the idea that nationalised industries, free from the whims of markets, could invest for the long term forgot the fact that they were instead subject to the whims of politicians who are also short term minded.
An early example of globalisation was 'triangular trade' - guns, gold and jewellery was shipped to Africa from Britain, slaves were shipped from Africa to the Caribbean, and cotton and tobacco went from the Caribbean to Britain.
The addition of hundreds of millions of lowpaid workers from China and other countries to the global economy (combined with lower communication and transport costs) has led to a sharp fall in global inequality alongside significant rises in inequality within countries - as poor countries' manual labourers get higher wages but developed countries' have wages pushed down
Unemployment is usually (these days) seen as the combination of factors:
there is always some frictional unemployment as jobs are destroyed and those workers search for a new job
There is also structural unemployment resulting from how markets function (or fail to do so). This can be the result of over-generous benefits, but there's little evidence of that in most countries. More likely it's due to workers not having the skills they need, or discrimination, or hiring and firing rules making it risky for employers to take on new staff
"As long as we live in a predominantly capitalist economy, culture will be shaped by the market." Examples being Beyonce, star wars
There is little evidence that immigrants push down wages for native workers - several UK studies have failed to find any significant impact. Even large influxes like refugees to Israel in 1990s or recently to Turkey have had only a small effect.
Immigration *is* associated with higher Innovation, international trade and knowledge transfer (especially in high-tech industries)
Technological change.is happening faster now - it took 40 years for landlines to reach half of Americans, bit only 10 for mobile.
Global warming is the biggest example of the economic problem, an 'externality'. This is where someone uses a free resource in a way that imposes a cost on others. A carbon tax or similar would mean we use less and entrepreneurs would have an incentive to come up with alternatives.
Workers have historically received about two thirds of the total value created by the economy (the 'labour share'). Since about 2008 however, this has decreased in many countries - we don't know whether this is temporary.
Monopolies don't foster innovation or decent prices because of the lack of competition. But too much competition can have a similar effect - the lack of profit most firms make can stymie innovation (as it requires upfront investment) and therefore prevent longer term reductions in costs to consumers.
On data and internet: "if you're not paying for the product, you are the product"
'The invisible hand' - this refers to the idea that, if markets work, then individuals rationally pursuing self-interest should maximise the value of what society produces. This is because of the price mechanism (supply and demand). But the counter to this is that markets don't work at all without government intervention (to establish property rights and enforced contracts).
companies limit risk: 'while capitalism may be all about taking risks, one of the key inventions that made modern capitalism possible does so by limiting risk.'
A 'bubble' is an episode where the market prices systematically deviate from those implied by publicly available information.
Burton Malkiel: "a blindfolded monkey throwing darts at a newspaper's financial pages could select a portfolio that would do just as well as one carefully selected by experts"
It's not so much the amount of debt that matters but its distribution - who owes what to whom.
There is no evidence to suggest that the financial crisis was caused or worsened by high levels of government debt, except in the case of Greece. The exceptionally low interest rates mean financing government borrowing has never been easier in UK. Most economists think it makes obvious sense for governments to borrow more to increase public investment and boost demand, but public and political fear of increasing public debt has so far blocked this route.
A major contradiction between capitalism and democracy is the former's principle that money determines access to power and resources while the latter's principle is one person one vote. In the US elected officials spend half their time fundraising and 9/10 winning candidates had the most money of those standing. A study found that the preferences of the average American have "a miniscule, near-zero, statistically non-significant effect" on political outcomes
Nationalisation became popular after WW2. The planning was essential to reconstruction. But the idea that nationalised industries, free from the whims of markets, could invest for the long term forgot the fact that they were instead subject to the whims of politicians who are also short term minded.
An early example of globalisation was 'triangular trade' - guns, gold and jewellery was shipped to Africa from Britain, slaves were shipped from Africa to the Caribbean, and cotton and tobacco went from the Caribbean to Britain.
The addition of hundreds of millions of lowpaid workers from China and other countries to the global economy (combined with lower communication and transport costs) has led to a sharp fall in global inequality alongside significant rises in inequality within countries - as poor countries' manual labourers get higher wages but developed countries' have wages pushed down
Unemployment is usually (these days) seen as the combination of factors:
there is always some frictional unemployment as jobs are destroyed and those workers search for a new job
There is also structural unemployment resulting from how markets function (or fail to do so). This can be the result of over-generous benefits, but there's little evidence of that in most countries. More likely it's due to workers not having the skills they need, or discrimination, or hiring and firing rules making it risky for employers to take on new staff
"As long as we live in a predominantly capitalist economy, culture will be shaped by the market." Examples being Beyonce, star wars
There is little evidence that immigrants push down wages for native workers - several UK studies have failed to find any significant impact. Even large influxes like refugees to Israel in 1990s or recently to Turkey have had only a small effect.
Immigration *is* associated with higher Innovation, international trade and knowledge transfer (especially in high-tech industries)
Technological change.is happening faster now - it took 40 years for landlines to reach half of Americans, bit only 10 for mobile.
Global warming is the biggest example of the economic problem, an 'externality'. This is where someone uses a free resource in a way that imposes a cost on others. A carbon tax or similar would mean we use less and entrepreneurs would have an incentive to come up with alternatives.
June 27, 2024
Questo libricino mi ha salvato dall'orribile "I misteri del castello" di Walter Scott mentre ero in Bulgaria.
Ho avuto difficoltà nel prendere il ritmo dei brevi saggi, ma soprattutto gli ultimi 15/10 capitoli si leggono con una curiosità e concentrazione che non mi aspettavo, forse perché passano da aspetti puramente economici a questioni più ampie, come l'ambiente, l'economia digitale, l'immigrazione, la povertà, la disuguaglianza, l'avidità, l'evoluzione e molti altri.
Direi che Jonathan Portes (l'autore) riesce nell'impresa di mantenersi neutrale, esponendo sia i punti di forza che i punti deboli del sistema capitalistico. La lettura è stata particolarmente istruttiva, perché mi ha fornito sia argomenti in supporto di alcune mie idee, sia argomenti che me le hanno fatto mettere in discussione.
Penso lo rileggerò fra qualche anno, per capirlo ancora meglio!
Ho avuto difficoltà nel prendere il ritmo dei brevi saggi, ma soprattutto gli ultimi 15/10 capitoli si leggono con una curiosità e concentrazione che non mi aspettavo, forse perché passano da aspetti puramente economici a questioni più ampie, come l'ambiente, l'economia digitale, l'immigrazione, la povertà, la disuguaglianza, l'avidità, l'evoluzione e molti altri.
Direi che Jonathan Portes (l'autore) riesce nell'impresa di mantenersi neutrale, esponendo sia i punti di forza che i punti deboli del sistema capitalistico. La lettura è stata particolarmente istruttiva, perché mi ha fornito sia argomenti in supporto di alcune mie idee, sia argomenti che me le hanno fatto mettere in discussione.
Penso lo rileggerò fra qualche anno, per capirlo ancora meglio!
February 17, 2019
This book is okay but it's perhaps a bit technical for people with no prior knowledge of economics and a bit dull for those with it. I would have felt completely lost reading this book had I not ever taken a university economics course, but from the title and layout you would expect the book to be for the absolute beginner. The book covers some interesting topics but no matter how interested in Economics you are, some of them will naturally probably be a bit boring. Not a bad read, was a gift to me.
July 5, 2023
This is one of the better books in the 50 ideas you really need to know series.
Most of the topics are relevant to the average person and the writer covers them fairly well.
I do wish behavioral economics had been covered. I also wish that Marxist ideas were directly refuted. A section on the Luddites and rejecting their ideas would have also been appreciated as that worldview is on the rise again.
Likewise while "the digital economy" is included I think the writer would have done better to talk about the role of technology in capitalism more broadly.
Most of the topics are relevant to the average person and the writer covers them fairly well.
I do wish behavioral economics had been covered. I also wish that Marxist ideas were directly refuted. A section on the Luddites and rejecting their ideas would have also been appreciated as that worldview is on the rise again.
Likewise while "the digital economy" is included I think the writer would have done better to talk about the role of technology in capitalism more broadly.
August 28, 2023
It was okay. Very opinionated. Didn’t deal with some of the moderately difficult subjects I was hoping it might express easily like quantitative easing, how central banks work and the macroeconomic nuance around inflation, unemployment and interest rates.
December 9, 2022
Simple and straight to the point
March 18, 2025
Interesting and accessible guide for beginners
Read
January 18, 2017Nice introduction book explaining the main concepts. But a rather dull read for anyone with at least basic knowledge of the field
February 3, 2017
An excellent overview of economics.
In the light of current events, there are passages which take on more significance and a new level of urgency.
In the light of current events, there are passages which take on more significance and a new level of urgency.
Displaying 1 - 9 of 9 reviews