In This Review

Capitalism Without Capital: The Rise of the Intangible Economy
Capitalism Without Capital: The Rise of the Intangible Economy
By Jonathan Haskel and Stian Westlake
Princeton University Press, 2017, 288 pp

In the context of business spending, “investment” is a word with diverse meanings, which often leads to confusion. Economists usually use it to refer to expenditures on tangible things, such as buildings and equipment—a kind of spending that raises future earnings. The authors of this informative book, by contrast, define it more broadly as expenditure today in the expectation of material rewards in the future. Haskel and Westlake note that in all rich countries, “intangible investment”—spending on things such as research and development and branding—has been growing relative to tangible investment. The data are often sketchy, but the authors report that intangible investment now exceeds the tangible kind in Finland and Sweden, and does so by even larger margins in the United Kingdom and the United States. The authors explore how the changing nature of investment will affect companies, investment analysts, economists, and governments, and they offer suggestions for all. This is a useful exposition of a number of widely used but poorly understood terms and concepts.