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Beach reads: Good, bad capitalism

Beachgoer reads a book

TEXT OF COMMENTARY

Kai Ryssdal: Take some bad housing numbers that came out this morning, combine them with crumbling credit markets, and how much more do you need to hear to start planning your escape to the beach?

We've asked our commentators to suggest the best business beach books they know. Titles that won't put you to sleep, just make you smarter. All while you dig your toes in the sand. Economist Marcellus Andrews picked one that really is all business.


Marcellus Andrews: Most folks want to keep risk in the rearview mirror as they make their vacation getaways. But I say, take a thirst-quenching book about risk straight to the beach. "Good Capitalism, Bad Capitalism" is a mind-opener.

Economists William Baumol, Robert Litan and Carl Schramm say that capitalism creates prosperity by replacing old technology with new technology, old skills with new skills. The idea that prosperity is born of destruction makes the first chunk of this book read like a horror story.

If this book were a cold beer, it would be an assault-your-tongue lesson in what grown-up brew is all about — strong and deliciously bitter. To prosper, we've got to subsidize science, technology and innovation. Go easy on taxing innovators — and yes, tax the rest of us instead.

Maximize innovation. But here's the real thump between the eyes: live with maximum insecurity, too.

Support free trade to prime that competitive thirst. In short, push the nation to adopt an "innovate or die" mindset in the interest of economic survival.

Now for the hard part: what the winners of the innovation game owe the losers is not the subject of this book. Are these guys crazy? No. They think that the only way America can stay rich is if Americans always at the cutting edge.

That's the best strategy for protection, the same way that sun screen lets you enjoy the sun without getting a bad burn. Take deep drafts of Good Capitalism, Bad Capitalism this summer, and get real about risk before risk gets real with you.

Ryssdal: Economist Marcellus Andrews lives in New York City.

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