The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Contemporary Capitalism

  • William Lazonick
Reference work entry


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.


Acquisitions Business enterprises Capitalism Collective capitalism Competitive advantage Conglomerate movement Contemporary capitalism Corporations Creative destruction Defined-benefit pensions Developmental state Dividend yield. Division of labour Economic development Entrepreneurship Financial commitment Foreign direct investment Globalization Great Depression Hostile takeovers Information and communications technology Innovation Japan, economics in Junk bonds Leveraged buyouts Lifelong employment Mergers Milken, M. NASDAQ New Deal New Economy business model New York Stock Exchange Old Economy business model Organization man Organizational integration Outsourcing Patents Research and development Schumpeter, J. A. Separation of ownership and control Shareholder value Social inclusion Stock options Stock price volatility Stock repurchases Strategic control Technology Venture capital 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • William Lazonick
    • 1
  1. 1.