Saving Capitalism from the Capitalists

About this book

Capitalism, or more precisely, the free market system, is the most effective way to organize production and distribution that human beings have found. Yet, financial markets are among the most highly criticized and least understood parts of the capitalist system. In Saving Capitalism from the Capitalists, Raghuram G. Rajan and Luigi Zingales argue that healthy and competitive financial markets are an extraordinarily effective tool in spreading opportunity and fighting poverty. Without vibrant, innovative financial markets, economies would invariably ossify and decline. Capitalism's biggest problem is the executive in pinstripes who extols the virtues of competitive markets with every breath while attempting to extinguish them with every action. This is a groundbreaking book that will radically change our understanding of the capitalist system, particularly the role of financial markets. It breaks free of traditional ideological arguments of the right and left and points to a new way of understanding and spreading the extraordinary wealth-generating capabilities of capitalism. From the Back Cover For nearly two centuries, scholars and politicians have debated the future of capitalism. In India, its critics have viewed it as intrinsically unstable, seeing signs of its collapse in every fall of the Mumbai stock market. Its supporters see it as the best way to allocate resources. In between are all those searching for a middle ground-a kinder capitalism or a more market-driven socialism. Raghuram G. Rajan, one of the few economists who had warned of a financial sector crisis before it turned to reality in 2008, and co-author Luigi Zingales, who has been involved in developing interventions to cope with its aftermath, argue that free, healthy and competitive financial markets occupy this very delicate middle ground. They are an extraordinarily effective tool in spreading opportunity and fighting poverty. Without them, economies would invariably ossify and decline. Yet, financial markets are among the most highly criticized and least understood parts of the capitalist system-because of the executives who extol their virtues with every breath while attempting to extinguish them with every action. Published previously but just as relevant today, Saving Capitalism from the Capitalists is a groundbreaking book that will radically change our understanding of the capitalist system, particularly the role of financial markets. It breaks free of traditional ideological arguments of the right and left and points to a new way of understanding the wealth-generating capabilities of capitalism. About the Author Raghuram G. Rajan is the governor of the Reserve Bank of India. He was chief economic adviser to India's finance ministry in the previous year and chief economist at the International Monetary Fund from 2003 to 2006. Rajan is one of the foremost academic experts on banking and on comparative financial systems. Luigi Zingales teaches entrepreneurship and finance at the University of Chicago's Booth School of Business. He is also a research fellow with a number of institutes and the director of the American Finance Association.