Capitalism and Society News
Capitalism and Society, the Journal of Columbia University's Center on Capitalism and Society, is pleased to announce the recent publication of books by two of its members: Amar Bhidé, the Lawrence D. Glaubinger Professor of Business at Columbia University's Graduate School of Business, and Robert Shiller, the Arthur M. Okun Professor of Economics at Yale University.
The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World, by Amar Bhidé. Princeton University Press, Fall 2008.
Many warn that the next stage of globalization—the offshoring of research and development to China and India—threatens the foundations of Western prosperity. But in The Venturesome Economy, acclaimed business and economics scholar Amar Bhidé shows how wrong the doomsayers are.
Using extensive field studies on venture-capital-backed businesses to examine how technology really advances in modern economies, Bhidé explains why know-how developed abroad enhances—not diminishes—prosperity at home, and why trying to maintain the U.S. lead by subsidizing more research or training more scientists will do more harm than good.
When breakthrough ideas know no borders, a nation's capacity to exploit cutting-edge research regardless of where it originates is crucial: our venturesome consumption—the willingness and ability of our businesses and consumers to effectively use products and technologies derived from scientific research—is far more important than our share of such research. In fact, a venturesome economy benefits from an increase in research produced abroad: the success of Apple's iPod, for instance, owes much to technologies developed in Asia and Europe.
Many players—entrepreneurs, managers, financiers, salesmen, consumers, and not just a few brilliant scientists and engineers—have kept the U.S. at the forefront of the innovation game. As long as their venturesome spirit remains alive and well we need not fear advances abroad. Read The Venturesome Economy to learn why—and see how we can keep it that way.
The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It, by Robert J. Shiller. Princeton University Press, August 2008.
The subprime mortgage crisis has already wreaked havoc on the lives of millions of people and now it threatens to derail the U.S. economy and economies around the world. In this trenchant book, best-selling economist Robert Shiller reveals the origins of this crisis and puts forward bold measures to solve it. He calls for an aggressive response—a restructuring of the institutional foundations of the financial system that will not only allow people once again to buy and sell homes with confidence, but will create the conditions for greater prosperity in America and throughout the deeply interconnected world economy.
Shiller blames the subprime crisis on the irrational exuberance that drove the economy's two most recent bubbles—in stocks in the 1990s and in housing between 2000 and 2007. He shows how these bubbles led to the dangerous overextension of credit now resulting in foreclosures, bankruptcies, and write-offs, as well as a global credit crunch. To restore confidence in the markets, Shiller argues, bailouts are needed in the short run. But he insists that these bailouts must be targeted at low-income victims of subprime deals. In the longer term, the subprime solution will require leaders to revamp the financial framework by deploying an ambitious package of initiatives to inhibit the formation of bubbles and limit risks, including better financial information; simplified legal contracts and regulations; expanded markets for managing risks; home equity insurance policies; income-linked home loans; and new measures to protect consumers against hidden inflationary effects.
This powerful book is essential reading for anyone who wants to understand how we got into the subprime mess—and how we can get out.