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How Capitalism Destroyed Itself

Technology Displaced by Financial Innovation William Kingston, School of Business, Trinity College, Dublin, Ireland
Capitalism has been sustained by inherited moral values that are now all but exhausted. A unique combination of a new belief in individualism and a long tradition of property rights had traditionally ensured that self-interested action also produced public benefit. However, these rights, including the laws underwriting economic and financial innovation and parliamentary democracy, were gradually captured and shaped by those who could benefit most from them. This fascinating book shows that the outcome is a reduced ability to generate real wealth combined with exceptional inequality, as well as a worldwide breach of the vital trust between voters and their representatives. Capitalism’s injuries are both self-inflicted and fatal.
Extent: 192 pp
Hardback Price: $110.00 Web: $99.00
Publication Date: 2017
ISBN: 978 1 78536 773 1
Availability: In Stock
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  • Economics and Finance
  • Economics of Innovation
  • Evolutionary Economics
  • Innovation and Technology
  • Economics of Innovation
Capitalism has been sustained by inherited moral values that are now all but exhausted. A unique combination of a new belief in individualism and a long tradition of property rights had traditionally ensured that self-interested action also produced public benefit. However, these rights, including the laws underwriting economic and financial innovation and parliamentary democracy, were gradually captured and shaped by those who could benefit most from them. This fascinating book shows that the outcome is a reduced ability to generate real wealth combined with exceptional inequality, as well as a worldwide breach of the vital trust between voters and their representatives. Capitalism’s injuries are both self-inflicted and fatal.

William Kingston uniquely deals with capitalism from a property rights standpoint, providing the first convincing explanation of economic cycles in terms of changes to these rights. The lucid exploration of the historical evolution of property includes a remarkable precursor of modern capitalism in medieval culture and pays particular attention to intellectual property. The book also calls attention to the harm that inaccurate measurement of economic activity can cause, both at the micro-level (auditing of corporations) and macro-level (the Kuznets GDP/GNP system). In conclusion, it argues that the exceptional levels of inequality today have been caused primarily by allowing financiers to escape from the laws that traditionally prevented them from ‘generating money from nothing’.

Challenging the orthodox thinking, this is an essential book for economists and political scientists in academia, the public sector and industry. It offers an imperative warning that capitalism’s next crash is coming sooner rather than later.
‘Kingston's emphasis on the role of culture and of ideas is welcome. . . This book should be required reading for every student of economics, every prospective banker, every civil servant, every candidate for public office and recommended reading for every citizen.’
– Studies: an Irish Quarterly Review

‘It is a serious piece of scholarship. Integrating economic history, economic thought, patent-hoarding, venture capital and the changing global economy, Kingston asks if modern capitalism might be an internally inconsistent system. Like Schumpeter, he is concerned that creative innovation might be stagnating into institutional ossification. It is an interesting argument, well presented, cross-disciplinary and thought-provoking.’
– David Reisman, University of Surrey, UK and Nanyang Technological University, Singapore

‘This sweeping account of the rise and projected fall of capitalism is as original as it is gripping. Kingston locates the hinge that moves capitalism as the institutions governing property rights, and argues persuasively that the system is now undermining itself as innovation shifts from the technological to the financial domain.’
– John A. Mathews, Macquarie Graduate School of Management, Sydney

‘Kingston’s history of the evolution of property rights, and on how property rights regimes influence and reflect the kind of economic activity people engage in, and how they regard economic activity, is interesting and provocative in its own right. Others have argued that capitalism seems to have lost much of the power to increase the productivity of economic activity that it once had, and the workings of modern financial systems are a good part of the problem. But no one else has tied these propositions closely to the evolution of property rights.’
– Richard R. Nelson, Columbia University, US

‘William Kingston is a prolific and thoughtful economic historian who has relied on such longstanding giants as Marx and Schumpeter, and new ones such as Minsky, to show how financial innovation has replaced technological innovation, and how this process is destroying the economic fabric of society. Kingston’s deep understanding of the ‘free-market economy’ makes this book a must-read.’
– Jorge Niosi, Université du Québec à Montreal, Canada

‘William Kingston’s illuminatingly provocative How Capitalism Destroyed Itself is a bibliographically rich and historically munificent treatment of the arguably inherent self-destructive tendency of capitalism.'
– Recensions
Contents: Preface 1. What Capitalism Was 2. Where Capitalism Came From 3. The Capture of Market Power 4. The Fatal Capture of Money 5. Could Anything Have Saved it? Epilogue: The Centre Could Not Hold Index