• Table of Contents
    • Abstract
    • Keywords
    • Article
      • 1 What is ‘capitalism’?
      • 2 The Old Economy business model
      • 3 ‘Maximizing shareholder value’
      • 4 The New Economy business model
      • 5 Stable and equitable growth?
    • Bibliography
    • How to cite this article

contemporary capitalism

William Lazonick
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
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The key to understanding ‘capitalism’ as a mode of resource allocation that generates economic growth is the organization and performance of its most innovative business enterprises. The ‘Old Economy business model’ that made the United States the world's most powerful nation in the post-Second World War decades came under challenge in the 1970s and 1980s, and the ideology of ‘maximizing shareholder value’ arose to legitimize a redistribution of income from labour interests to financial interests. The ‘New Economy business model’ emerged in the 1980s and 1990s to drive the innovation process, contributing, however, to unstable and inequitable economic growth.
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How to cite this article

Lazonick, William. "contemporary capitalism." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 23 February 2018 <http://pde-test1.pde.pm.semcs.net/article?id=pde2008_C000570> doi:10.1057/9780230226203.0304

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