Goodreads helps you keep track of books you want to read.

Start by marking “Capitalism Without Capital: The Rise of the Intangible Economy” as Want to Read:

Other editions

Enlarge cover

Rate this book

Clear rating

1 of 5 stars 2 of 5 stars 3 of 5 stars 4 of 5 stars 5 of 5 stars

Open Preview

Capitalism Without Capital: The Rise of the Intangible Economy

Jonathan Haskel,

Stian Westlake

3.81 · Rating details · 1,757 ratings · 187 reviews

The first comprehensive account of the growing dominance of the intangible economy

Early in the twenty-first century, a quiet revolution occurred. For the first time, the major developed economies began to invest more in intangible assets, like design, branding, R&D, and software, than in tangible assets, like machinery, buildings, and computers. For all sorts of businesses ...more

Get A Copy

Hardcover, 288 pages

Published November 28th 2017 by Princeton University Press (first published November 7th 2017)

More Details... Edit Details

Friend Reviews

To see what your friends thought of this book, please sign up.

Reader Q&A

To ask other readers questions about Capitalism Without Capital, please sign up.

Lists with This Book

Ghosts of the Tsunami by Richard Lloyd Parry

The Retreat of Western Liberalism by Edward Luce

The Economist - Books of the Year, 2017

45 books — 15 voters

Capitalism Without Capital by Jonathan Haskel

Skin in the Game by Nassim Nicholas Taleb

The Design of Everyday Things by Donald A. Norman

Tribe Non-Fiction Reads

42 books — 4 voters

More lists with this book...

Community Reviews

Showing 1-30

Average rating 3.81 ·

Rating details

· 1,757 ratings · 187 reviews

More filters

Sort order

Start your review of Capitalism Without Capital: The Rise of the Intangible Economy

Aug 14, 2018 Bill Gates rated it really liked it

By the second semester of my freshman year at Harvard, I had started going to classes I wasn’t signed up for, and had pretty much stopped going to any of the classes I was signed up for—except for an introduction to economics class called “Ec 10.” I was fascinated by the subject, and the professor was excellent. One of the first things he taught us was the supply and demand diagram.

There are two assumptions you can make based on this chart. The first is still more or less true today: as demand f ...more

flag 388 likes · Like · see review

Jan 12, 2020 Anna rated it really liked it

Shelves: nonfiction, technology, economics

'Capitalism Without Capital' falls into that droll sub-genre, 'biting critiques of capitalism by orthodox economists'. The authors argue that the increase in intangible investment by companies, which is often recorded in the form of expenses rather than investment, sheds light on many features of developed world economies, job markets, and political fractures. Like so many economics books, at times it frustrated me with unquestioned reductive assumptions, for example that GDP growth is a desirab ...more

flag 15 likes · Like · see review

Apr 07, 2018 Vance rated it liked it

The title “Capitalism Without Capital” tells part of the book’s story. The first half of the book is simply principles of macroeconomics with explanations for gross domestic product and other variables. I could have skipped that part without missing much of the story.

In general, intangible capital, such as human capital and technologies, have and are changing the economy. This supports greater productivity and economic growth along with challenges of structural unemployment and the potential fo ...more

flag 8 likes · Like · see review

Jan 30, 2018 Marks54 rated it really liked it

I generally do not like the genre of popular business/economic trade books, but I will make an exception for this. This is a book by two economic researchers discussing the rise in importance of “intangible assets” in the global economy. The general punchline is that these sorts of assets are not well accounted for by current economic scorekeeping but that they really have grown in importance in recent decades and that the failure to account for them has undermined our understanding of how conte I generally do not like the genre of popular business/economic trade books, but I will make an exception for this. This is a book by two economic researchers discussing the rise in importance of “intangible assets” in the global economy. The general punchline is that these sorts of assets are not well accounted for by current economic scorekeeping but that they really have grown in importance in recent decades and that the failure to account for them has undermined our understanding of how contemporary economies work. While the intuition behind intangible assets is not new, recent growth in such technological areas as computing, telecommunications, and software, along with the increasing sophistication of how these are applied to everyday life, has led to significant changes in contemporary economies, The authors clarify a number of concepts related to intangible assets and how they are calculated. They discuss how these assets - and they are assets - differ from more traditional tangible/physical assets and how their growth affects the overall economy. The authors discuss how the strategies of global leaders are increasingly driven by their stock of intangible assets and how their competitive behavior differs from that of more traditional firms. Recommendations are made about how to manage effectively in a world of intangible assets and how to cope with some of the issues raised by the rise to importance of these assets.

Got all that? It is a standard tour for a book with this sort of agenda. What is nice about this book is that it is well written and well thought out. The material also seems fairly current. The authors know what they are talking about and know how to explain complex ideas without oversimplifying. I also like that they are not overselling their case. This is not a book with an obvious sales pitch or policy agenda - apart from understanding intangible assets and acting on that understanding. The authors also do a good job at explaining how their ideas apply in everyday life. For example, they begin with the business of running a gym and perform a comparison of how the business today differs from the business when it began - that difference entailing of course a redistribution of assets towards intangibles that provide much more value that the physical value of the weights and exercise machines found at most gyms. It is an informative example.

The authors also provide a four part framework of how intangible assets differ from tangible assets and how that matters for firms. Intangible assets are: 1) scalable; 2) sunk; 3) produce synergies; and 4) generate spillovers. (Read the book for definitions!) When I first say the four factor framework, I hesitated, since it sounded more like a consulting framework that could be found in the Harvard Business Review. But the expositions were reasonable, clear, and consistent with the research literature. The exposition of this framework is a good starting point for someone attempting to understand the strategies of such “new economy” firms as Uber, AirBnB, Amazon, or Google. There is only so much one can do in a short treatment, but the treatment here was fairly effective. It can probably help someone to understand the strategies of non “new economy” firms that act like platforms. DeBeers would be a good example.

This book has earned some good reviews in some good places. The praise has been well justified. This is an excellent business book that is well worth reading. ...more

flag 7 likes · Like · see review

Jan 20, 2020 Veronica rated it it was amazing

Shelves: economics

- Intangible investment represent sunk costs, generate spillovers, are more likely to be scalable, and tend to have synergies or complementarities with each other: they are more valuable together in the right combinations.
- The modern-day equivalent has become “shot through with systems, processes, relationships, and software. This is not so much innovation, but innervation—the process of a body part being supplied with nerves, making it sensate, orderly, and controllable.”
- Investment as defi ...more

flag 4 likes · Like · see review

Mar 13, 2018 Andrew rated it really liked it

Shelves: politics-and-political-theory, economics-business-finance

Capitalism Without Capital: The Rise of the Intangible Economy by Jonathan Haskel and Stian Westlake, is an interesting book about the nature of intangible investments and the growing importance of them in modern economics. The book covers a number of fields, including business strategy, management and leadership principles, and macroeconomics and politics. It examines intangibles from multiple angles, first examining how they are measured, their characteristics, and then delving into their cons Capitalism Without Capital: The Rise of the Intangible Economy by Jonathan Haskel and Stian Westlake, is an interesting book about the nature of intangible investments and the growing importance of them in modern economics. The book covers a number of fields, including business strategy, management and leadership principles, and macroeconomics and politics. It examines intangibles from multiple angles, first examining how they are measured, their characteristics, and then delving into their consequences, from intangibles impact on economic stagnation and inequality, to issues with intangible infrastructure, financing, and intangibles impact on business, with policy initiatives being offered in the last chapter.

Intangibles are investments made into concepts and ideas that are not capital goods (like a factory, tractor, or anything else businesses invest in). Intangibles include concepts like branding, organizational structure, research and development and so on. Namely, these are investments that are difficult to calculate based on their direct value to a company, but they certainly do have value. If one looks at large companies like Google and Uber, one can see the impact of intangibles and their importance to a modern business. The concepts and ideas these companies develop are valuable, but do not exist as concrete goods. Intangibles cannot be sold off or claimed as collateral on a loan, for example. They are sunk costs that cannot be recuperated, but often add massive amounts to a firms profitability.

The authors propose four main characteristics for intangibles, called the four S's:
1. Scalability - intangibles can be scaled to a higher degree than a capital good - for example if Starbucks opens a new chain in a nation, they can easily bring their organizational structures, branding and culture with them to the new stores with minimal overhead or investment needed.
2. Sunkeness - intangibles are sunk costs - once the money is spent, it is spent. This means while intangibles could be valuable, they are also extremely risky for a few reasons.
3. Spillovers - it is easy for intangible investments to be implemented and utilized by competing firms in a market. For example, Toyota's famous supply chain method, or the organizational tactics at Starbucks, can be quickly copied and implemented by other firms. This leads to an issue where companies may spend large sums of money developing certain intangibles principles, only to see them cheaply and more efficiently adopted by a competitor.
4. Synergistic - intangibles are highly synergistic. This means that they often benefit from other intangible principles or developments. If one looks at Silicon Valley in the US, one can see the benefits of these synergies; concentrations of innovative and increasingly monopolistic firms that benefit from new developments in many fields.

The authors posit that the rise of intangibles in importance to businesses is an important factor in declining productivity in Western nations, and one of the causes of the "secular stagnation" phenomena being seen today. This is when a reduction in interest rates by a nations Federal or National bank does not lead to an increase in investments in the marketplace. The authors posit that the increasing market share of intangibles in business investment, coupled with the risks involved in funding these initiatives - whether it be the risk of failure, or the risk of handing competitors advantages one firm worked to develop - make business wary of investing. The authors also tie this issue in to financing intangibles. Banks are reluctant to lend to intangible heavy firms with unproven success as these investments are inherently risky. It is difficult to offer collateral on an intangible investment, and if, for example, an R&D project fails and bankrupts a firm, the bank has little to take to recuperate their losses.

Another issue with intangibles revolves around their impact on equality levels. The authors posit that intangibles have a negative impact on equality. Intangibles have the ability to generate massive amounts of wealth (look at Google, for example), but also lead to increasing concentrations of wealth in increasingly monopolistic firms. Google has the search engine market cornered for much of the globe, and competing with them as a smaller firm is next to impossible. What bank would lend a small firm money to try and develop a smarter search engine? What venture capitalist firm would explore this as an investment opportunity? This issue leads to increasing concentrations of market share in leading firms, as these firms also have the ability to breach into new markets, engage in R&D at more risky levels, and have ready access to lending, equity and investment opportunities. In contrast, upcoming firms have very little chance of receiving similar opportunities for themselves, thus squeezing them out of the market. These disadvantages have serious consequences for a nations marketplace, and thus an impact on its citizens. Governments have to explore utilizing public funds to encourage innovation and productivity in the marketplace. They also need to explore a greater role in R&D initiatives, as smaller firms shy away from investing in research projects, and banks shy away from lending to them.

The authors examine intangibles and the infrastructure required to benefit them. This includes encouraging livable cities - as the authors argue that concentrations of these industries due to their synergistic nature encourage the exchange of ideas through face to face meetings and such. They disagree that the online sphere has disrupted this form of social capital, and believe it is of the utmost importance to intangible investments. They also argue that intangibles require increased norms, policies and legislation to monitor and control. These come in the forms of government legislation, investment frameworks, tax code changes and so on. An examination of the financial systems that intangibles operate in, and the limits of these systems is present. The authors look at financing form banks, financing from equity, and venture capital firms as three tracks to investments, and offer benefits and criticisms to all three.

Finally, the authors look at the business and policy side of intangibles. The authors note that the increasing importance of intangible investments to business have led to numerous changes to a firm. Firms have begun prioritizing management principles and innovative strategies to run companies. This has led to positive changes - like an increasing focus on collaborative leadership principles - as well as negative changes - such as the increasing reliance on non-compete clauses to force workers into jobs by pain of lawsuit.

From a policy perspective, the authors have a few arguments, and some interesting ones. Although the authors look at criticisms of intangible reliance, there are also many benefits to a nations economy - from developing new products and services that could save lives, to protecting an artists intellectual property, to bringing in loads of taxable returns from successful business, intangibles can have a very positive impact on society. If this is to be so, the authors argue, then the negatives of intangibles need to be addressed. This can be done by reforming tax systems, encouraging investments in intangibles through financial policy, funding R&D from public coffers, encouraging education to ensure workers are able to adeptly move through the working sphere and remain innovative and relevant (this can be done through investments in education, reducing its cost or making it free, and funding apprenticeship programs in specific industries). The authors also caution that many a government has fallen into the trap of trying to build a new Silicon Valley, and instead of this objective, governments should focus on the incubator principles. These include making cities livable and workable (and affordable) to encourage synergistic behaviour, taking a greater interest in directly overseeing developments in this field (which can include regulation changes or publicly funding R&D, for example) and so on.

This was an interesting book on a newer area of study in economics. Although the importance of intangible concepts like branding, organizational structure, and R&D, are well known, the ability to fund these initiatives, utilize them to increase profits, and plan for them through legislation is not. The lack of structure and framework, and the lack of knowledge we have on the intangible economy is a detriment to both the private and the public sphere, and this impact can only be mitigated through increasing study, as well as through smart policy initiatives by governments. The authors argue that intangibles will continue to play a central role in an economy, and therefore need to be molded through smart and direct policy that encourages investment, financing of intangibles, and reduces negative impacts in terms of intellectual property disputes, secular stagnation, and so on. I quite enjoyed this book, and found it interesting in terms of how it connects to many other topics in politics and economics today: from stagnation and inequality, to the increasing reliance on intangible goods and services, changing rights in the workplace, and so on. This was book was well written, and I would recommend it to anyone interested in economics. The book is detailed, well sourced and well written. ...more

flag 5 likes · Like · see review

Aug 09, 2019 May Ling rated it really liked it

Shelves: economics

Oh man... one day I know my criticism of all these writers is going to come back to bite me. But what can I do? The front half is lovely and wonderful. Not a fan of the last few chapters. Editor failed to catch a pretty sexist conclusion on p. 177. If you just remove the 1 paragraph, it would have been fine. Also, the final chapters, seem to suggest the capital markets aren't addressing this intangible assets. I think they are either watering it because they don't think the audience knows enough ...more

flag 4 likes · Like · see review

Nov 16, 2018 Jason Furman rated it it was amazing

Shelves: economics, nonfiction

An outstanding book that will change the way you think about the economy. Jonathan Haskel and Stian Westlake’s book has a sweeping premise but is grounded in the economics literature while taking great care to never overclaim. The strength of the book is taking an idea that is the subject of an increasing amount of research, the increase in investment in intangibles, and then drawing connections to everything from shortcomings of financial markets to the rise of populism.

Starting just over a dec An outstanding book that will change the way you think about the economy. Jonathan Haskel and Stian Westlake’s book has a sweeping premise but is grounded in the economics literature while taking great care to never overclaim. The strength of the book is taking an idea that is the subject of an increasing amount of research, the increase in investment in intangibles, and then drawing connections to everything from shortcomings of financial markets to the rise of populism.

Starting just over a decade ago economists let by Carol Corrado, Charles Hulten and Dan Sichel have documented the substantial growth of investment in intangibles like software, R&D, artistic originals, intellectual property, brands, training, organizational systems and the like—a category that represents an increasingly large fraction of total investment. Thanks to their efforts and other economists, including Haskel, statistical agencies have increasingly incorporated much but not all of these intangibles into the national accounts. Capitalism Without Capital goes through the data on the rise of intangibles along with a discussion of how we measure the data.

The book gets even more interesting when the authors define the four important economic characteristics of intangibles: (1) they’re a sunk cost (if you go bankrupt you can’t sell them like you would a truck); (2) they have spillovers (R&D, for example, benefits companies beyond the one that developed it); (3) they are scalable (effectively zero/low marginal cost); and (4) they have synergies (IP works best in conjunction with other IP).

Together these characteristics play out in a variety of ways and contribute to understanding a number of major economic phenomenon including the slowdown of productivity growth, the rise of inequality, and what some perceive to be the increasing short-termism in financial markets. In none of these causes do the authors claim it is the sole explanation, and in some case they admit they are speculating—like the way that intangibles give rise to metropolitan concentrations, benefit certain types of workers, and thus play a role in the rise of populism. But in all cases they have a compelling additional point to the already familiar explanations.

The book is also strong on policy recommendations, including the importance about greater clarity on intellectual property rights (the authors are more agnostic on the strength of those rights), the importance of an infrastructure that supports the intangible economy, developing ways to foster capital markets since it is hard to lend against intangibles as capital, limiting land use restrictions that get in the way of intangible synergies, and funding R&D. Most of these are not brand new policy recommendations but several of them gain increased urgency when viewed through the lens of Capitalism Without Capital. ...more

flag 3 likes · Like · see review

Sep 30, 2018 Diego rated it really liked it

Shelves: economics-capitalism

This book isn’t what I thought it was going to be about but it was a pleasant surprise. Provides a clear understandable breakdown of intangible assets vs tangible assets and how they impact and are impacted by capitalism. Very applicable nowadays that proves intangible assets play a factor in the growing difficulty managing capital.

flag 3 likes · Like · see review

Jul 16, 2018 Daniel Riveong rated it it was amazing

Shelves: management, economics

Capitalism without Capital gives an excellent overview of where we are with capitalism, specifically that what drives innovation today is also driving inequality and socio-political challenges. Haskel does an excellent job of putting together ideas from Jaron Larnier and Peter Thiel to Thomas Piketty and Mariana Mazzucato.

Haskel delivers an excellent primer on what's happening today but does not go beyond. Is this the end point of capitalism? If not, how do we get to the next level? Despite tha ...more

flag 3 likes · Like · see review

Oct 08, 2018 Matt rated it really liked it

An economist from 100 or even 50 years ago would have a hard time understanding or explaining the economic clout of Google. One reason why is because the measure of Google's assets is largely a measure of intangible assets -- nonphysical stuff. Intangible assets are those that 'typically involve the development of specific products or processes, or are investments in organizational capabilities, creating or strengthening product platforms that position a firm to compete in certain markets.' In o An economist from 100 or even 50 years ago would have a hard time understanding or explaining the economic clout of Google. One reason why is because the measure of Google's assets is largely a measure of intangible assets -- nonphysical stuff. Intangible assets are those that 'typically involve the development of specific products or processes, or are investments in organizational capabilities, creating or strengthening product platforms that position a firm to compete in certain markets.' In other words, ideas, knowledge, software, and even 'social relations' -- fuzzy concepts. And not only are intangible assets difficult to define, they are even more difficult to measure. How would an economist assign value to the Toyota lean manufacturing system? To Google's search algorithm? To the Apple brand?

But Google, Microsoft, and Facebook have become economic powerhouses whose value is not attached to how many machines or buildings or even computers they own. Haskel and Westlake are clearly delving into important territory here. For more than 13 years I've worked for a company whose primary assets are intangible, so my own experience provided a lens for their analysis, giving this very academic treatment a more personal context. Our business is a rather old one -- we create subscription-based library search products. But the business model has evolved throughout the past several decades. Our products have always served as a means to either provide access to research or offer directions to researchers. Quality information and reliability have always been important. But as more and more content becomes freely accessible, the value our companies can provide researchers has changed too. User experience, added value, and brand loyalty become increasingly important pieces of the equation, and my company has done its best to identify these needs. In other words, what started out as a fairly intangible-heavy enterprise has become even more so.

It would be enough for the authors to provide a good working understanding of what intangibles are and how they have grown in importance in our modern economy. But that's really only about a third of this book. The authors put much more of their energy into asking how the modern economy is likely to differ from traditional economies in terms of how markets can be cornered (they can more easily), whether private sector spending on R&D will be impacted (negatively, apparently), and how firms and governments should respond to changing circumstances (a lot, actually). For example, intangible investments are disproportionately 'sunk costs'. Historically, if a corporation wanted to scale up R&D by purchasing physical assets, in the event of that effort failing, those assets could at least be sold off. Not the same with many intangible assets. Intangible assets are also more likely to generate spillovers, since it's relatively easy for other businesses to try to take advantage of intangible investments they don't themselves make. (That's obviously not true if your competitor builds a manufacturing facility.)

On the whole, the book itself is a very approachable but fairly comprehensive look at this area of research. Because its coverage is so broad, it's also very speculative. But I suppose that's part of the fun. Thesis opportunities abound in these pages. ...more

flag 2 likes · Like · see review

Mar 11, 2019 Frank Stein rated it really liked it

A large part of this book is just a recap of every significant piece of economic research that has been published over the last 40 years, including everything from Edward Glaeser's work on inter-industry spillovers in large cities to Sherwin Rosen's 1981 article on the "superstar economy." Yet the central insight animating the book, that the rise of an economy based on "intangible" assets (ideas, processes, patents) rather than "tangible" assets (trucks, machines, factories), explains much of th A large part of this book is just a recap of every significant piece of economic research that has been published over the last 40 years, including everything from Edward Glaeser's work on inter-industry spillovers in large cities to Sherwin Rosen's 1981 article on the "superstar economy." Yet the central insight animating the book, that the rise of an economy based on "intangible" assets (ideas, processes, patents) rather than "tangible" assets (trucks, machines, factories), explains much of these diverse research findings and ties them all together, is truly worthwhile, and does put the modern economy in a different light.

The authors claim that the intangible economy has four distinct attributes, summarized as the four Ss: that assets are easily Scalable, that the costs involved in new assets are usually Sunk, that the new assets create different types of Spillovers, and that the assets usually have important Synergies with each other. These attributes combine to create two other attributes, uncertainty and contestedness (of asset ownership).

The authors point out that it is surprising how long it took researchers to understand the importance of intangible assets. It wasn't until the 1980s that the US Bureau of Economic Analysis began adjusting computer prices for quality, and it wasn't until 1993 that the UN's Systems of National Accounts argued that software should be treated as an asset just like the computers it ran on (the US finally adopted the recommendation in 1999). The authors attribute much of the modern understanding of intangibles to the research of Carol Corrado and Daniel Sichel (at the Federal Reserve) and Charles Hulten (at the University of Maryland), who, since 2005, have showed that, starting just a decade earlier, intangible assets actually overtook tangible assets as a percent of all investment. The authors also show that these intangible assets explain the sudden growth of large and lucrative firms (like Facebook, Google, and Uber), and that two-thirds of the rise of inequality has come from successful workers sorting into these large firms, as Jae Song and others have shown, which then pay them much more. It also explains the rise of VC finance, because, as Alex Edmans has shown, public stock markets tend to have trouble evaluating R&D investment.

There are tons of interesting stories to bolster the analytics here, from Welshman Richard Roberts invention of the automatic spinning mule from spinning jennies and water frames in the 1820s, to the creation of Mylan's Epipen franchise, despite lack of patent protection, today. The basic animating idea here is interesting and well-supported, as the authors show, by hundreds of research articles. That some of it is old-hat should not diminish the importance of the overall insight or the value of this book. ...more

flag 2 likes · Like · see review

Aug 20, 2018 Laurent Franckx rated it really liked it

The title of this book is hugely misleading - and I see this as a compliment.
You see, when I first saw the title, I thought this was just another management-guru/futuristic type of book, that would extrapolate from a small sample of biased case studies to prove bold statements about life, the universe and everything. Reality turned out to be quite different, fortunately. This book is a well documented and nuanced analysis, based on an extensive literature on the subject, and it is extremely care The title of this book is hugely misleading - and I see this as a compliment.
You see, when I first saw the title, I thought this was just another management-guru/futuristic type of book, that would extrapolate from a small sample of biased case studies to prove bold statements about life, the universe and everything. Reality turned out to be quite different, fortunately. This book is a well documented and nuanced analysis, based on an extensive literature on the subject, and it is extremely careful in its policy analysis.
So what is it about? In a few words, the book tackles the ever increasing importance of intangible assets (such as intellectual property, innovative business processes and marketing practices, artistic creations, software etc) in a country's capital base. So it's definitely not a book about the end of capital, not even about the end of physical capital, but rather about the growing importance of non-physical capital (of course, that makes for a less catchy title).
According to Haskel and Westlake, the key characteristics of intangible assets are that they are more likely:
• to be scalable: once the investment has taken place, they can be used over and over at very low cost (in the case of software, even at zero cost);
• to be sunk: once the investment has taken place, it is impossible to recover more than a very small fraction of the initial investment,
• to generate spillovers: it is relatively easy for other business to take advantage of intangible investments they don't make themselves
• to exhibit important synergies with one another, but also with tangible assets ("combining different ideas and intangible assets sits at the heart of innovation")

As a result, the returns of investments in intangible assets are more uncertain, and these assets are more likely to be contested (it is hard to prove who owns them, and their benefits spill over to others).
Haskel and Westlake argue that the increasing importance of such intangible assets has wide ranging implications that are not yet properly understood.
For instance, our current measurement practices don't account properly for these assets, and, as a result, we underestimate the magnitude of investment going on in our economies. Still, underinvestment may be a real problem as current financial practices are not well suited to deal with the specificities of firms with lots of intangible assets, as such assets cannot be used as collateral for loans. Existing intellectual property right regimes do not strike the right balance between providing incentives for investing in innovation (which requires the protection of the incomes generated by innovation) and promoting the generation of spillovers and the creation of synergies (which would require free access regimes).
There is also an increasing divergence between best performing firms in our economies and "the rest": small differences in approaches can have a huge impact on market shares and profitability if is easy to scale up the "best" solution. However, this leads to both higher inequality and a reduction in the effective levels of competition.
But the implications in terms of inequality and social disruption go even further than that: the attitudes and culture needed for the new economy (such as openness and curiosity) lead to the alienation of the substantial number of people who don't posses them, and who fall behind economically. (Haskel and Westlake speculate that this may have contributed to Trump and Brexit).
It would lead us to far here to summarize all the points made in this short but extraordinarily rich and broad book (you'll ever learn something about the view you can have of Saint Paul's cathedral from Richmond). Arguably, from a policy point of view, the most important issue raised by Haskel and Westlake is that "it will be harder for most business to appropriate the benefits of capital investment in the economies of the future than in the tangible-rich economies we are familiar with. This is an important change: successful capitalism depends on the idea that private firms have a reasonable expectation of receiving some of the returns from their investment. When this is not the case, firms have less incentive to step in, and governments may feel obliged to step in." This "would mark a significant change from forty years of deregulation and decreasing government involvement in the economy."
The last chapter of the book then discusses the possible forms such government interventions could take. We should definitely give Haskel and Westlake credit for not overreaching themselves there, and to remain very prudent in their policy recommendations. In their own words, the chapter is a "collection of dilemmas and hard problems". The earth would be a better place if more people shared this modesty.

In summary, whilst this book does not really contain any radically new insights, it does provide an excellent overview of the existing insights about the impact of new technologies and business practices on the great economic policy issues of our age. It is an excellent complement to other books such as "Matchmakers" by Evans and Schmalensee and "Machine, Platform, Crowd" by McAfee and Brynjolfsson.
...more

flag 2 likes · Like · see review

May 21, 2020 Taylor Curran rated it really liked it · review of another edition

Capitalism Without Capital, by Imperial College economist Jonathan Haskel and Royal Statistical Society chief executive Stian Westlake, is a fascinating look at "the rise of the intangible economy". It examines the growing economic importance of intangible assets; how the distinct characteristics of these assets may be contributing to modern economic ills such as secular stagnation and rising inequality; and how policymakers can respond to these changes.

-----

Over the last thirty years, investmen ...more

flag 1 like · Like · see review

Jul 26, 2018 Nils rated it liked it

Shelves: future-of-capitalism

This book argues that intangible as opposed to physical investments have fundamentally different properties, which require different managerial techniques and different regulatory and tax apparatus. There are four main differences: intangible assets tends to be highly scalable, involve significant sunk costs, and they tend to spillover effects and exhibit synergies with one another. Haskell and Westlake take a broad view of what counts as intangible assets - including not just obvious things lik This book argues that intangible as opposed to physical investments have fundamentally different properties, which require different managerial techniques and different regulatory and tax apparatus. There are four main differences: intangible assets tends to be highly scalable, involve significant sunk costs, and they tend to spillover effects and exhibit synergies with one another. Haskell and Westlake take a broad view of what counts as intangible assets - including not just obvious things like intellectual property, brands, and software, but also more subtle things like proprietary business processes or complex supply chains. As the "relative dematerialization" of the economy proceeds, these types of firms and policies will become every more important.

Some of their more subtle observations concern the changing role of managers in intangible-intensive economies. They note the paradox that we live in age of declining deference and skepticism toward authority that coincides with "the cult of the manager." (This paradox will seem less puzzling to the sociologist or historian, who will immediately hypothesize that it may be different populations that exhibit these divergent traits.) But the point is that managers have in some ways even more important roles in the intangible economy as in the tangible ones: the key talent of management becomes less about mastering operational control than about providing inspiring vision and leadership by example. But it depends above all on whether you are primarily a producer or consumer of intangible assets: "If you are predominantly a producer of intangible assets, you want to build an organization that allows information to flow, helps serendipitous interactions, and keeps the key talent. If you are more a user of tangible assets, you will want to have more hierarchies and short term targets, since you are less worried about information flows from below and more concerned about low performance and stopping influence activities." (196-97)

As is often the case in business books, this one pays scant attention to the various ways in which the phenomenon it is describing may manifest itself in illicit industries or in terms of producing new kinds of opportunities for innovative forms of arbitrage. "In a poorly governed economy," Haskell and Westlake observe, "the amount of intangibles whose purpose is to attract rents goes up." (114) But they mention only in passing how the licensing of intangible assets to low-tax jurisdictions are the main way that most firms engage in legal tax avoidance, much less offer proposals for how this might be addressed by policy.

They do offer some interesting policy suggestions, however. For example they observe that since intangible assets are hard to fund with debt (they make poor collateral, compared to tangible assets) policymakers would do well to encourage a move from debt financing to equity financing, moving for example to tax debt payments. They acknowledge that this would be like "performing open heart surgery on a central part of the corporate tax system," which would be massively resisted by vested interests, but it seems worth considering. (Combining this with a Tobin tax to abate hot money in equity investment would also be worthwhile.) ...more

flag 2 likes · Like · see review

Mar 18, 2018 Drtaxsacto rated it it was amazing · review of another edition

For the past couple of years there has been a lot of discussion about something called Secular Stagnation (Beginning with books by Tyler Cowan and Robert Gordon) there has been a lot of handwringing about whether the US economy is stuck in a low growth mode for a very long time. Part of the answer to understand whether the two distinguished economists are right is to understand the effects of moving increasingly to intangible goods.

You know the story, an iPhone has lots of physical parts but wha For the past couple of years there has been a lot of discussion about something called Secular Stagnation (Beginning with books by Tyler Cowan and Robert Gordon) there has been a lot of handwringing about whether the US economy is stuck in a low growth mode for a very long time. Part of the answer to understand whether the two distinguished economists are right is to understand the effects of moving increasingly to intangible goods.

You know the story, an iPhone has lots of physical parts but what really counts is all that software and intellectual property that makes the products so useful. Haskel and his partner Westlake have provided a huge jump for those of that are interested in the effects of making these changes. One of the things I liked best about this volume is that each chapter starts with a clear conceptual overview and then concludes with a summary.

They go through a couple of chapters laying out some conceptual issues on intangibles - for example -most intangibles have the benefit of non-rival consumption (that is if I use an intangible, you may also be able to use it without diminishing the quantity of the good), and spillovers (intangibles often grow in usability if they are used by many people) and spent costs (intangibles often require upfront expenditures which are not recoverable - buy a fleet of vehicles and you can recover part of your investment - but buy specific code to run your business and it may not have value to others). They also raise some problems with intangibles - for example valuation is something we have not figured out. (Remember the dot.com.bomb). They can also be key candidates for rent seeking (trying to use public policy to enforce rights which are not clearly established). The Mickey Mouse problem is but one example (although Mickey was a complete ripoff of an earlier Buster Keaton movie the copyrights on the character run well into the next decade. They have some interesting ideas about how to deal with IP to assure that it does not lock in the first founders (or the patent trolls who come in after the creative phase). They explain why venture funding rather than debt is a better way to encourage the creation of intangibles.

One of the issues in the "new" economy is growing inequality produced in part by the big payoffs to early players in a field - they seem to like Pikety's thoughts on inequality a lot more than I do but regardless they have a good section on inequality. One interesting number they come up with is that the GINI Co-eficent for income is almost half that for wealth (.34 v .64).

The book has a series of recommendations about how an economy which relies on intangibles can sustain growth. I personally disagree with Gordon and Cowan's theses. The authors are at least partially buy into the Cowan/Gordon thesis. They also seem to be more supportive of government R&D than I am. But their book is a pretty good way to stimulate thinking about possible effects of these changes.

What is best about this book is its clarity. It produces an excellent framework to think about the issues for all of us brought about by an increasing reliance of intangibles. ...more

flag 2 likes · Like · see review

Oct 22, 2018 Samuel Peck rated it really liked it · review of another edition

A pretty informative book about how and why global economies are increasingly becoming intangible-intensive, and the potential implications. The sober writing is dull at times, but at the same time helps to ensure that the narrative stays grounded without being too hyperbolic like so many recent books about economic and industry change. The book does at times seem too much influenced by economics academia, and many of the scatter plot charts in Chapter 2 seem like tea-leaf-reading - a potential ...more

flag 2 likes · Like · see review

Dec 06, 2019 Boni Aditya rated it it was amazing

Shelves: economics-finance

This is one of the best books about economics that I have read in recent times. The book hits the perfect chord with recent times. The book explains the 1% and the 0.01 percent perfectly. The four S related to Intangibles perfectly explains how the Intangible economy differs from the tangible economy. Synergies, Spillovers, Sunk Costs and Scalability, account for the explosion in the intangible economy.

The book was extremely painful to read though, because of the textbook style approach adopted ...more

flag 1 like · Like · see review

Feb 19, 2020 Daniel rated it it was amazing

This is not a book about capitalism without money, but abut intangibles such as patents, kaizen/6 sigmas, brand names, networks etc.

1. There has been a shift from tangible to intangible investment.
2. Much of this does not appear in company balance sheet and thus are under-appreciated.
3. There are 4 property of intangibles:
3.1 Scalable: think internet apps
3.2 Sunk cost: all the money spent are mostly not worth anything to outsiders
3.3 Spill over: competitors can totally copy you and make a be ...more

flag 1 like · Like · see review

Mar 07, 2020 Sunil Kumar Peruru rated it it was amazing

Another good read found on Good reads. Its so amazing a machine that knows little about me can come up with great recommendations. Hail machine intelligence! I am convinced that machines are NOT just here to do the mundane jobs of humans.

This books explains the fundamental shift in the global economy towards intangible forms of investments- The rise in Intangible economy. A lot of effort went into explaining the change in the nature of investment over the last couple of decades (Investments in t ...more

flag 1 like · Like · see review

Oct 01, 2020 Tom Rogers rated it really liked it

Shelves: refer-back-to

I really enjoyed this book. It's written more like a academic paper with arguments, proof and conclusions but I found the topic really interesting.

New things for me were:

* Understanding the characteristics of intangible investments
* Why an intangible economy could lead to lower investment unless governments step in.

and the resurfacing idea (also covered in Innovators DNA and other books) of thinking/focusing energy around looking for synergies between ideas/intangible assets.

This is a book I w ...more

flag 1 like · Like · see review

Dec 30, 2019 Kangwa Chanda rated it really liked it

This book was very informative and enlightening on the growing market and investment opportunities that intangibles assets present.

It has provided me with new ideas on business and how the government can provide for the business community and encourage investments.

Intangibles is a subject that I have not paid much attention to before reading this book despite benefiting from and contributing to the market for intangibles.

The examples and analogies in the book, I felt, weren’t always related t ...more

flag 1 like · Like · see review

Apr 07, 2018 Mehrsa rated it liked it

This book should have been an academic paper or an op-ed. It was so dry and chart and number-y. The point is solid (though I would like to see some pushback from the Picketty camp on the inequality explanations) and the advice is also good (cultivate intangible talent and adult education seems like a great idea), but the text is pretty dry. It also feels to me to be overly optimistic about the potential of the intangible economy to remake society in a positive way. There are warnings, but I thin ...more

flag 1 like · Like · see review

Feb 28, 2019 Kisor rated it it was amazing

Shelves: audible-in

Why software developers get more money compared to Doctors if skill is considered? Ans: Doctor's service is a rival asset, only one consumer at a time, but software can be used by any number of consumers simultaneously(auto scale the infrastructure using container services).

Got a different perspective on things I have already seen. E.g how intangible assets play a major role in success of tangible asset rich businesses like Gym, Coffeehouse etc. ...more

flag 1 like · Like · see review

Mar 23, 2019 Brahm rated it it was ok · review of another edition

Shelves: audiobook, did-not-finish

Did not finish. Got 42% into the audiobook and it was just not that interesting. Some things are physical, some things are intangible.

Only the second Bill Gates recommendation that I wasn't that into. ...more

flag 1 like · Like · see review

Oct 27, 2019 Ali Sattari rated it really liked it

Shelves: economics

A good read on characteristics, effects and mis-conceptions around intangible (knowledge based?) assets. It's not that easy to balance (or nudge for/against) tangible and non-tangible assets, but there are ways governments and big corporations can do. ...more

flag 1 like · Like · see review

Apr 06, 2018 Stephen rated it really liked it

Shelves: economics, politics, futures, business

This book offers to provide some clues to explaining the nature of current capitalism. Originally, the concept of capitalism was that capital accumulates within a corporate form in order to yield a flow of income to the owners of capital. Capital took the form of land and buildings, plant, stock, work in progress, and so forth. In a nutshell, in the form of tangible assets.

In recent decades the nature of capitalism has changed. Value no longer resides in the physical capital owned by companies, This book offers to provide some clues to explaining the nature of current capitalism. Originally, the concept of capitalism was that capital accumulates within a corporate form in order to yield a flow of income to the owners of capital. Capital took the form of land and buildings, plant, stock, work in progress, and so forth. In a nutshell, in the form of tangible assets.

In recent decades the nature of capitalism has changed. Value no longer resides in the physical capital owned by companies, but is a far more nebulous concept - intangible assets. In tangible assets are hard to define. They might consist of a client list, or a specific process, or a form of intellectual property. By definition, they are intangible. We can't see them, or measure them, or even embody them. The intangible assets of one company may contain great value to that company, but are worthless to another. This is an interesting lesson why so many mergers and acquisitions fail to deliver value.

Intangible assets share four common features. They have high sunk costs, meaning that the bulk of the cost of acquiring an intangible asset lies in acquiring the first one. Another way of saying this is the marginal cost of providing an intangible asset is minimal. Second, they are scalable. In a true sense, the use of an intangible asset doesn't use up that asset in any appreciable way. In some senses, the greater use of the intangible enhances it's value. Third, they have high spillover effects, meaning that the intangible may have use here, but it also has some use there as well, and some yonder in addition to that. Finally, intangibles create synergies. The use of one intangible asset in one way could give rise to a subsequent use in another way. Taken together these four aspects of intangible assets are driving what we call the knowledge economy.

This has a number of consequences. The authors demonstrate the ways in which the rise of the intangible economy has led to falling productivity (although that may be a consequence of GDP statisticians measuring the wrong thing), a fall in investment (once again, the wrong thing is being measured), and rising inequality. According to the authors, these are not the features of a late capitalist economy, but the features of an emergent intangible economy. They have a point.

The rise of the intangible economy presents problems for the ways in which intangibles are recorded in company accounts. Generally speaking, they aren't. This creates downstream problems with financing businesses with a high proportion of intangible assets, and is coupled to the problem of taxing them. In turn, it suggests that current industrial policy tends to be wide of the mark as well. This adds up to a fairly convincing case.

The book fals to address what is, for me, the key issue. We can all agree about the rise of the intangible economy, but what does it represent? Is this the harbinger of our post-capitalist future? Or does it represent the capitalist framework evolving into another form of capitalism? I have no answers to these questions, but whichever it is, I suspect that it will be dominated by companies whose value is intangible.

...more

flag 1 like · Like · see review

Jun 16, 2020 Lucian rated it it was amazing · review of another edition

One of the smartest book on "future economics"/"digital economy" - what is happening to the economy and the transition from an industrial world to a post-industrial world. ...more

flag 1 like · Like · see review

Feb 01, 2020 Phuong Thanh rated it it was amazing

Must-read for anyone interested in modern business

flag 1 like · Like · see review

Mar 02, 2018 Aakash Aggarwal rated it really liked it

I have read this book with utmost sincerity and I am deeply impressed by the primer on the changing capital stock of the world. Needless to say, the level of content in this book is nominal and needs to be supplemented with a good reading of academic papers (Marianna Mazucato, Baruch Lev and others) to understand the state of tangible - intangible investments, public vs private sector investments, accounting regulations, treatment of intangible assets in the future, management and leadership imp ...more

flag 1 like · Like · see review

« previous 1 2 3 4 5 6 next »

new topic
Discuss This Book

There are no discussion topics on this book yet. Be the first to start one »

Recommend It | Stats | Recent Status Updates

Readers also enjoyed

See similar books…

Genres

Economics

197 users

Business

108 users

Nonfiction

86 users

Economics > Finance

32 users

Politics

20 users

Science > Technology

8 users

Audiobook

7 users

History

7 users

Social Science

4 users

Currency > Money

4 users

See top shelves…

About Jonathan Haskel

Jonathan Haskel

22 followers

Books by Jonathan Haskel

Le capitalisme sans capital (Hors collection)

Measuring and Accounting for Innovation in the Twenty-First Century

More…

News & Interviews

Kazuo Ishiguro: A Dystopian Book in Dystopian Times

Kazuo Ishiguro insists he’s an optimist about technology. “I'm not one of these people who thinks it's going to come and destroy us,” he...

Trivia About Capitalism Withou...

No trivia or quizzes yet. Add some now »

Quotes from Capitalism Withou...

“As their expanded name suggests, EMI wasn’t only a record label. In the 1960s the company was as interesting for its electrical activities as for its musical ones. In 1959 it had launched a commercial computer called the EMIDEC 1100; it also made color TV cameras, recording equipment, guided missiles, and kettles. The piles of cash brought in by Beatlemania helped create a culture of investment at EMI. One of the things they invested in was medical equipment research. Godfrey Hounsfield, the researcher behind the EMIDEC, began work on the first commercially viable medical scanner. As the project developed, he was significantly supported by the UK government, which provided over £600,000 of support or £7 million at 2016 prices (Maizlin and Vos 2012). Over four years, he and his team invented and built the first computed tomography scanner (CT or “CAT scanner”—the A stands for “axial”). This was a remarkable feat of science and engineering. For the first time, it allowed doctors to make accurate, 3D representations of patients’ soft tissues. This was a real medical breakthrough, transforming everything from brain surgery to cancer treatment. Hounsfield was piled with honors: he received a Nobel prize and a knighthood and was made a Fellow of the Royal Society. But from a commercial point of view, it was something of a failure for EMI.” — 0 likes

“Scalability becomes supercharged with “network effects.” A network effect exists when assets become more valuable the more of them exist.” — 0 likes

More quotes…

See a Problem?

Preview — Capitalism Without Capital by Jonathan Haskel

Capitalism Without Capital: The Rise of the Intangible Economy

Get A Copy

Friend Reviews

Reader Q&A

Lists with This Book

Community Reviews

new topic
Discuss This Book

Readers also enjoyed

Genres

About Jonathan Haskel

Books by Jonathan Haskel

News & Interviews

Trivia About Capitalism Withou...

Quotes from Capitalism Withou...

See a Problem?

Preview — Capitalism Without Capital by Jonathan Haskel

Capitalism Without Capital: The Rise of the Intangible Economy

Get A Copy

Friend Reviews

Reader Q&A

Lists with This Book

Community Reviews

new topicDiscuss This Book

Readers also enjoyed

Genres

About Jonathan Haskel

Books by Jonathan Haskel

News & Interviews

Trivia About Capitalism Withou...

Quotes from Capitalism Withou...

new topic
Discuss This Book