Table of Contents

List of Illustrations vii Acknowledgments ix 1 Introduction 1 Part I The Rise of the Intangible Economy 2 Capital's Vanishing Act 15 3 How to Measure Intangible Investment 36 4 What's Different about Intangible Investment? The Four S's of Intangibles 58 Part II The Consequences of the Rise of the Intangible Economy 5 Intangibles, Investment, Productivity, and Secular Stagnation 91 6 Intangibles and the Rise of Inequality 118 7 Infrastructure for Intangibles, and Intangible Infrastructure 144 8 The Challenge of Financing an Intangible Economy 158 9 Competing, Managing, and Investing in the Intangible Economy 182 10 Public Policy in an Intangible Economy: Five Hard Questions 208 11 Summary, Conclusion, and the Way Ahead 239 Notes 243 References 253 Index 267

About the Author

Jonathan Haskel is professor of economics at Imperial College London. Stian Westlake is a senior fellow at Nesta, the UK's national foundation for innovation.

Reviews

"One of the Economist.com “Wise Words 2017 Books of the Year” in Economics and Business"

"One of Blackwell’s Best of Non-Fiction 2017"

"One of Financial Times (FT.com) Best Books of 2017: Economics"

"Selected for Askblog’s Books of the year 2017, chosen by Arnold Kling"

"The portion of the world's economy that doesn't fit the old model just keeps getting larger. That has major implications for everything from tax law to economic policy to which cities thrive and which cities fall behind, but in general, the rules that govern the economy haven’t kept up. This is one of the biggest trends in the global economy that isn’t getting enough attention. If you want to understand why this matters, the brilliant new book Capitalism Without Capital by Jonathan Haskel and Stian Westlake is about a good an explanation as I’ve seen."---Bill Gates

"The historical view of ‘capital as something tangible persists and limits our thinking,' the authors argue. To be sure, exactly which intangible assets qualify as capital can be debated endlessly. In Capitalism Without Capital, [they] choose a broad definition and explore its implications. In so doing, they provide insights into some puzzling questions . . . [and] make a good case that we don't know as much as we think because some of our tools for measuring economic performance are out of date."---George Molloan, Wall Street Journal

"Economist Jonathan Haskel and UK government adviser Stian Westlake describe in an entertaining and engaging way why governments need to count innovation as an engine of profit."---Ehsan Masood, Nature

"One of this year's most important and stimulating economic reads. . . . Read this book."---Tyler Cowen, Marginal Revolution

"Recommended reading for venture capitalists and investment counselors."
*Kirkus Reviews*

"For an introduction, though, it would be hard to do better than Capitalism without Capital, which is clear and lively and raises--without having all the answers--the relevant questions."---Diane Coyle, The Enlightened Economist

"Haskel and Westlake’s book focuses on the rise of the intangible economy. They are not trying to make any statement on the EU, but in one chapter of their book they plot tangible and intangible investment against an OECD measure of employment strictness. The results are fascinating. In their own words: 'countries with more restrictive hiring and firing invest more in tangibles and less in intangibles'."---Graeme Leach, CityAM

"And before anyone starts talking about 'the pettiness of arguing over symbols', let me point you to an amazing new book by an ex-colleague of mine, Stian Westlake, called Capitalism Without Capital: the Rise of the Intangible Economy."---Pat Kane, The National

"An intriguing book. . . . Perhaps the most surprising facts in a book full of surprises is how large investments in intangible assets--in research and development, software, databases, artistic creations, designs, branding and business processes--now are. . . . Messrs Haskel and Westlake have mapped the economics of a challenging new economy."---Martin Wolf, Financial Times

"[Capitalism without Capital] needs to be read by anyone seeking to understand the nature of modern capitalism and its politics."---Daniel Finkelstein, The Times

"A first-rate book."---Arnold Kling, Askblog

"The book makes its case in a lighthearted, conversational way that will appeal to economists and non-economists alike."
*The Economist*

"A great new book Capitalism without Capital by Jonathan Haskel and Stian Westlake suggests the rise of intangible assets makes corporate banking riskier."---Manish Sabharwal, The Indian Express

"In Capitalism without Capital, Haskel and Westlake examine the key characteristics of intangible investments, including scalability, sunk costs, spillover effects, and synergies. . . . Capitalism without Capital is an essential introduction to an important and often overlooked driver of the modern economy."
*HuffPost*

"The best books on economics take a theme that is instantly recognisable and intuitively correct, and run with it. Capitalism Without Capital, which has been causing a stir recently by charting the rise of so-called intangible investment, is thus a good and thought-provoking book. . . . And, unlike a lot of economics, it is firmly rooted in the world we are in."---David Smith, Sunday Times

"[Capitalism without Capital is] superb and important."---Yuval Levin, National Review

"[Capitalism without Capital] is a very relevant and timely book."---Peter A. Coclanis, Raleigh News & Observer

"The growing importance of the intangible economy is explored in [this] fascinating book."---John Looby, The Sunday Times

"Haskel and Westlake tell this story in a compelling way that is chock-full of examples that make the argument concrete and make the book highly readable."---Daniel E. Sichel, Business Economics

"Capitalism Without Capital offers a non-technical, wide-ranging scrutiny of the increasing growth of ephemeral goods and services in the economy. The authors provide a consistent economic explanation for the growth of gigantic firms and conglomerates supplying intangible goods and use this analysis, which is especially appropriate for cultural economics, to analyse the finance of this fast-growing sector."---Ruth Towse, Journal of Cultural Economics