A Capitalism for the People: Recapturing the Lost Genius of American Prosperity Hardcover – Jun 5 2012
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[Zingales’s] ringing denunciation is the Capitalism and Freedom of our time.”
David Brooks, New York Times
An influential book.”
Steven M. Davidoff, New York Times
[F]ascinating . Zingales provides an enormous service by laying out such persuasive evidence.”
[A Capitalism for the People] is the book that hits closest to the mark on the question of where the American center-right ought to go in the next few years.” Sacramento Bee
Zingales offers more than rehashed Friedman or Hayek. It’s a book that should appeal to tea partyers and the Occupy Wall Street crowd.”
Zingales presents a striking dichotomy .engaging.” Financial Times
Zingales’s fundamental diagnosis is right .[T]his remains a stimulating essay on the nature of American capitalism and the issues that will determine the pace of America’s relative decline.” Marginal Revolution, Tyler CowenI know you have book fatigue, popular economics book fatigue, policy book fatigue, and books-with-subtitles-like-this fatigue, all at once. But this book is really, really good. It hits all the right notes, is clearly written, and refers to academics as the new crony capitalists. I agreed with almost all of it. If I had to pick out one book, of this entire lot of books, to explain what is going on right now to a popular audience of non-economists, this might well be it.” J. Bradford DeLong, University of California, Berkeley
More than 30 years ago, Milton and Rose Director Friedman raised high the banner of small-government free-market libertarianism with their Free to Choose. Now, a generation later, income inequality is substantially higher, the globe is even more interconnected, and our partial financial deregulation has backfired badly. Luigi Zingales thus has a harder task as he tries to update the small-government free-market libertarian position for the 21st century. But he has done a very good job at it.”
Robert J. Shiller, author of Finance and the Good Society
This remarkably creative book, driven by a strong moral conviction, offers a bold array of ideas for us to ponder, so we can really make the American capitalist model work better for everyone.”
Edmund S. Phelps, Director, Center on Capitalism and Society, Columbia University
In A Capitalism for the People, Luigi Zingales joins the small but influential group of economists who see that America’s economy is now more and more corporatist, less and less capitalist. His impressive account of our downhill slide is enriched by his deep knowledge of the harm wrought by the worst excesses of Italian crony capitalism. A must-read.”
Nell Minow, co-author of Corporate Governance and co-owner and board member of GMI Ratings
An especially accessible and holistic assessment of what went wrong in our financial markets and an especially thoughtful and constructive proposal for the future. Highly recommended!”
Paul Ryan, U.S. Congressman, Wisconsin
In A Capitalism for the People, Luigi Zingales exposes the pernicious collusion of big business and big government offering the sharp analytical perspective of a world-renowned economist and the unique personal perspective of an immigrant living the American Dream. This must-read for policymakers and citizens alike serves as a lucid call to action for rediscovering what makes America exceptional.”
N. Gregory Mankiw, Robert M. Beren Professor of Economics, Harvard University, and author of Principles of Economics
A Capitalism for the People is a wise, deep, and timely book. With lively prose, Zingales diagnoses what is right and wrong with the U.S. economy. Whether your political sympathies lie with the Tea Party, Occupy Wall Street, or someplace in between, you will learn much about how we can best promote an economic future that works for all of us.”
[A]n elegy to the America (Zingles) found when he moved here 24 years ago.”
[An] accessible and powerfully argued book.”
[A Capitalism for the People is] unquestionably insightful and thought-provoking, and it has plenty of smart policy recommendations .I do strongly recommend A Capitalism for the People to anyone looking for a robust and pragmatic vision of free market economics directed at current problems.”
LA ProgressiveZingales is excellent.” Iain Martin, The Telegraph[A] brilliant and important new book.” Mechanics Institute Library
[Zingales] provides a forceful look at how pro-business forces overwhelmed the pro-market principles that made American capitalism great, and how we can get it back on track. This book should have a wide readership, from the Occupy Wall Street crowd to Tea Partyers.”
The American Conservative
Zingales hits a winning note .Zingales offers a refreshing and improved program for saving capitalism.”
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Most Helpful Customer Reviews on Amazon.com (beta)
Many blame "capitalism" for the financial crisis. Zingales argues and demonstrates that there is an enormous difference between "capitalism" and "the capitalists", and between "pro-market" and "pro-business" choices and policies. It is the capitalists and pro-business policies that are to blame, not capitalism. Pro-business choices have favored the incumbents (rich people). As a result, outsiders (ordinary people) have seen their opportunities reduced, their shot at the American dream denied. The book argues that we need to put a stop to the cozy relationship between politicians, Wall Street and big business. Zingales demonstrates (with logic and plenty of examples) that we need pro-market policies that foster competition and meritocracy, and which ultimately benefit ordinary people.
This is a great book. I strongly recommend it to anyone who cares about the future of America, from supporters of (true) capitalism to Occupy Wall Streeters.
Suppose you also learned that Robert Rubin, then the Secretary of Treasury under President Bill Clinton, was lobbying for changes to the Act that would remove the restrictions on banks. (Such a bill passed in 1999 with a bipartisan majority of 343-86.)
You still might not find that too outrageous. There were, after all, reasonable arguments against the Glass-Steagall restrictions and even today there is controversy over their advantages and disadvantages.
But finally you learn that Rubin left his post at the Treasury Department exactly one day after the bill passed (he had actually resigned 6 weeks before) and just 108 days later he was hired by Citigroup (yes, the firm he had helped through his lobbying efforts to change Glass-Steagall) for a salary of $15 million a year and, as author Luigi Zingales points out, "without any operating responsibilities."
It was not, as Zingales points out, illegal. But was it right?
Consider it Exhibit A in the case Zingales makes against "crony capitalism," the unholy alliance of business and government. "Business" may be commonly perceived to be in the camp of the Republicans but, as Zingales shows, crony capitalism is perhaps the most successful ongoing bipartisan effort since the fabrication of the first pork barrel.
That is how we end up with Dwayne Andreas, once the CEO of food and commodities giant Archer Daniels Midland, buying Jimmy Carter's peanut warehouse and, a few years later, selling Bob Dole an apartment in Bal Harbor, Florida. (Andreas' Wikipedia page reports that he is "one of the most prominent political campaign donors in the United States, having contributed millions of dollars to Democratic and Republican candidates alike.")
Similar examples abound in Zingales' systematic documentation of how the US economy has gone from "pro-market" capitalism to "pro-business" cronyism. Our overly large federal government has spawned an explosion of lobbying, influence peddling and corruption. Zingales astutely points out that the "Occupy" and the "Tea Party" movements are actually aligned against the same opponent. The Occupiers may focus their wrath on business and the Tea Party on government, but to Zingales they are two sides of the same coin.
Zingales, a professor of Finance at the University of Chicago, is particularly sensitive about crony capitalism. He immigrated to the United States from Italy specifically to escape the corruption of the Italian system, in which getting ahead was a function of who you know and not what you know. Corruption is the norm. In an amusing but telling example Zingales says that if a mayor in Italy advised the citizens to tape their windows, as an American mayor did in advance of stormy weather, Zingales would have ignored the advice, assuming the mayor's brother was selling tape.
Zingales is a capitalist, a believer in the free market. In his view, however, many of the elements which enabled the free market to create so much wealth while generating so little resentment in the United States are shifting unfavorably. He highlights the undermining of support for the free-market system driven by increases in inequality for reasons other than meritocracy. As Zingales says, "the perception...that the system is rigged."
One manifestation of this "rigging" is the bailouts. Zingales devotes a chapter to detailing how the increasing involvement of the government in the economy, through spending and regulation, and the increasing coziness of government with the businesses it was ostensibly regulating, led almost naturally to the use of taxpayer money to bail out financial institutions in crisis. (And not just financial institutions, as evidenced by the multiple bailouts of the auto industry.) All of which is harmful both to popular support for what is called "the free market" as well as to the operation of the market itself.
Zingales is at his best documenting how we have gone astray. The book is filled with examples and anecdotes and supplemented by Zingales' insight as an economist, explaining exactly how these developments are harmful.
He provides several recommendations, which make up about half of the book. His proposals are a mix of traditional solutions, such as school vouchers to improve education and improvements in bankruptcy laws to restore the balance between borrowers and lenders, and some creative ideas such as "retooling vouchers" to reward schools based on their success in actually finding new jobs for the unemployed workers they train. He has a host of proposals designed to "promote" competition (such as "reinventing" antitrust to focus not on market power but on political power).
As a member of academia, Zingales believes business ethics should be featured more prominently in business schools. He would like to see opprobrium become the social norm for unethical business behavior as opposed to the current culture of turning a blind eye or even rewarding it.
Finally, Zingales desperately wants to reduce the influence of lobbying on the political and economic landscape. While he makes a convincing case that lobbying should be curtailed, his proposals do not inspire confidence. He calls for "public shaming" of companies which abuse lobbying. He believes in an increase in the use of class-action lawsuits. The reality is that as long as government remains large and intrusive, lobbying will be a problem. Reducing the size of government, and therefore reducing the rewards from lobbying, may be the best hope.
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