Book Review: Capitalism without Capital – The Rise of the Intangible Economy. Jonathan Haskel and Stian Westlake, 2018, Princeton University Press.
A most interesting book which starts out by asserting that a shift in investing strategies by firms over the last 50+ years, from tangibles to intangibles, has largely gone unmeasured and as such helps explain a number of things, including our current economic malaise as well as low reported productivity growth. Well written, timely, and broad based, the authors do a nice job tackling what some might see as an esoteric point. Much of the research they draw on I have read, so I was already leaning toward their way of thinking. Indeed, my research into software and its impact on productivity plays into their story directly. See 2018 Won’t See a Massive Productivity Boost From AI – 2019 Might Show It.
The book demonstrates nicely and lucidly that the invisible hand has been nudging firms to shift investment into all kinds of intangibles, and that spend and return on that spend has not been singled out in reported numbers and measuring systems geared to a world of tracking tangibles. The first part of the book contains most of the data and references, and to help my economic research this was most interesting. The second half of the book looks at related aspects of a more intangible-based economy, including how firms fund themselves, capital market failure, worker education, industry structure, public policy and even the scale and theory of firms’ size. Many issues are raised, most of which make sense, and a number of possible solutions are laid out. We will all be talking about these in the years to come.
Excellent book for anyone interested in a broad understating, economically grounded, for how our information-based (intangible) economies are changing. A nice complementary book to Infonomics by Doug Laney. Recommended 9 out of 10.