Jamie's Reviews > Good Capitalism, Bad Capitalism, and the Economics of Growth and Prosperity

Good Capitalism, Bad Capitalism, and the Economics of Growth ... by William J. Baumol
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Jan 01, 12

Read in January, 2012

Centering on the idea that entrepreneurship is a key determinant of sustained economic growth, this book prescribes four national level measures: 1) Make it easy for entrepreneurs to start businesses (ie. bankruptcy protection and access to finance); 2) Ensure successful entrepreneurs are rewarded (ie. contract and property rights, taxation, and regulations); 3) Discourage unproductive entrepreneurship (ie. unlawful or non-value adding); and 4) Incentivize continual innovation and commercialization of ideas (ie. open markets and anti-trust).

This book draws on past studies and historical events to guide the development of policies specific to developed and developing countries in support of greater entrepreneurship . India, Taiwan, China, UK, Japan, Ireland and the US demonstrate that there is no one-size fits all solution. Distinctions however in their level of education, culture, democracy, macroeconomic stability, pace of change and governance over time helps to draw out important factors that support sustained economic growth.

Micro-lending only forms part of the solution by merely helping to replicate rather than innovate new ideas. What is needed are policies that promote innovative entrepreneurship at the margin through progressive and transitional changes to important contributing factors such as labor protections, capital markets and property rights. Some more tangible suggestions include governments monitoring and disseminating important global technical developments for the benefit of their business community and accelerating the commercialization of university-based innovations.
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