Capitalism Without Capital ─ Accounting for the Crash

An unusual consensus has developed among economists that the 'long boom' before 2008, and the subsequent crisis and recession, resulted from a global excess of capital. Over-supply of saving drive down capital costs, encouraging excessively risky investment and preventing the scrapping of outmoded plant. Capital's inexorable growth is also blamed for a prolonged squeeze on wages, rising elite wealth and worsening global inequality. This book explores the obvious clash between such arguments and actual measurements of capital, which show a small and shrinking 'productive' component, and a deepening disconnection between capital accumulation and economic growth. It traces the conflict to the continued absence of consistent definitions or measurements of capital, and neglect of the complex connection between aggregate capital and wealth. Capital 'gains' and 'losses', and the growing domination of income statements by balance sheets, undermine attempts to sidestep the problem by reconstituting economics as a system of flows.

Educated long enough ago to have encountered the unsolved problems of capital theory, Alan Shipman left economic research to pursue business journalism, financial analysis, freelance writing and bicycle maintenance before returning to economics in 2008 to find out why the problems still hadn't been solved.