From Poverty to Prosperity: Intangible Assets, Hidden Liabilities, and the Lasting Triumph Over Scarcity

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From Poverty to Prosperity: Intangible Assets, Hidden Liabilities, and the Lasting Triumph Over Scarcity
By Arnold Kling and Nick Schulz
Encounter Books, 2009
350 pp. $27.95
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The central thesis of this book is that mainstream economics, with its emphasis on labor and capital and its focus on the efficient allocation of an economy's output, is not so much wrong but utterly misleading in its understanding of modern economies, especially that of the United States. By rough analogy with computers, it is the software rather than the hardware -- the intangible assets rather than the tangible -- that really makes a modern economy run: rules, customs, norms, standards, and, above all, entrepreneurship. These factors have raised societies' standards of living to previously unthinkable levels, improvements that are well documented in the book. Over half the text is devoted to interviews with ten well-known economists. (Four have won Nobel Prizes.) All of them underline the importance of technological change, more than savings and investment, in assuring economic progress.