Acknowledgements xi
Prefacet Stories About Wealth Creation xiii
Introduction: Making versus Taking 1
Common Critiques of Value Extraction 4
What is Value? 6
Meet the Production Boundary 8
Why Value Theory Matters 11
The Structure of the Book 15
1. A Brief History of Value 21
The Mercantilists: Trade and Treasure 22
The Physiocrats: The Answer Lies in the Soil 28
Classical Economics: Value in Labour 33
2. Value in the Eye of the Beholder: The Rise of the Marginalists 57
New Times, New Theory 58
The Eclipse of the Classicals 59
From Objective to Subjective: A New Theory of Value Based on Preferences 60
The Rise of the 'Neoclassicals' 62
The Disappearance of Rent and Why it Matters 71
3. Measuring the Wealth of Nations 75
GDP: A Social Convention 76
The System of National Accounts Comes into Being 83
Measuring Government Value Added in GDP 85
Something Odd about the National Accounts: GDP Facit Saltus! 90
Patching Up the National Accounts isn't Enough 98
4. Finance: A Colossus is Born 101
Banks and Financial Markets Become Allies 103
The Banking Problem 104
Deregulation and the Seeds of the Crash 110
The Lords of (Money) Creation 115
Finance and the 'Real' Economy 117
From Claims on Profit to Claims on Claims 122
A Debt in the Family 127
5. The Rise of Casino Capitalism 135
Prometheus (with a Pilot's Licence) Unbound 137
New Actors in the Economy 142
How Finance Extracts Value 146
6. Financialization of the Real Economy 161
The Buy-back Blowback 162
Maximizing Shareholder Value 165
The Retreat of'Patient'Capital 171
Short-Term ism and Unproductive Investment 174
Financialization and Inequality 177
From Maximizing Shareholder Value to Stakeholder Value 183
7. Extracting Value through the Innovation Economy 189
Stories about Value Creation 189
Where Does Innovation Come From? 191
Financing Innovation 195
Patented Value Extraction 202
Unproductive Entrepreneurship 206
Pricing Pharmaceuticals 207
Network Effects and First-mover Advantages 213
Creating and Extracting Digital Value 219
Sharing Risks and Rewards 222
8. Undervaluing the Public Sector 229
The Myths of Austerity 233
Government Value in the History of Economic Thought 239
Keynes and Counter-cyclical Government 241
Government in the National Accounts 245
Public Choice Theory: Rationalizing Privatization and Outsourcing 249
Regaining Confidence and Setting Missions 259
Public and Private Just Deserts 263
From Public Goods to Public Value 264
9. The Economics of Hope 270
Markets as Outcomes 274
Take the Economy on a Mission 277
A Better Future for All 279
Bibliography 281
Notes 297
Index 331