Doing Capitalism in the Innovation Economy: Markets, Speculation and the State

Hardcover (Print)
Buy New
Buy New from
Used and New from Other Sellers
Used and New from Other Sellers
from $12.95
Usually ships in 1-2 business days
(Save 67%)
Other sellers (Hardcover)
  • All (16) from $12.95   
  • New (10) from $20.98   
  • Used (6) from $12.95   


The innovation economy begins with discovery and culminates in speculation. Over some 250 years, economic growth has been driven by successive processes of trial and error: upstream exercises in research and invention and downstream experiments in exploiting the new economic space opened by innovation. Drawing on his professional experiences, William H. Janeway provides an accessible pathway for readers to appreciate the dynamics of the innovation economy. He combines personal reflections from a career spanning forty years in venture capital, with the development of an original theory of the role of asset bubbles in financing technological innovation and of the role of the state in playing an enabling role in the innovation process. Today, with the state frozen as an economic actor and access to the public equity markets only open to a minority, the innovation economy is stalled; learning the lessons from this book will contribute to its renewal.
Read More Show Less

Editorial Reviews

Publishers Weekly
Consumers measure the economy's strength by the things that affect them most, including job security, prices for staples like food and gas, and home values. As the Warburg Pincus Technology Investment team's director, Janeway aims this economic treatise at financial professionals, like himself, who shape consumers' economic life while assessing the economy very differently. Drawing on 40 years of experience in venture capital, Janeway breaks the "Innovation Economy" down into three abstract components: the state, defined by its coercive power over the market; the market economy, comprised of "institutions that enable the production and exchange of goods and services"; and financial capitalism, dubbed "discontinuous opportunism." The book's first half relates the many changes he has witnessed on Wall Street, from the advent of the computer, to the resurgence of IPOs, to the explosion in venture capital. The second half advises investors on accessing opportunity. Seeking to promote understanding of how bubbles work in the economy, Janeway offers detailed accounts of several incidents from history, emphasizing the role of the state. This dense tome will find its ideal audience among the market-savvy.
(c) Copyright PWxyz, LLC. All rights reserved.
From the Publisher
Named one of the 'Best Economics Books of the Year'
Financial Times

"A rewarding memoir about the learning, training and life experience required to achieve mastery in the venture economy."
Kirkus Reviews

“Bill Janeway, a key creator of modern venture capital, tells the amazing story of the intersection of economics and innovation. This book is essential to anyone who wants to understand technology and how its creation will be financed for decades to come."
Marc Andreessen, co-creator of the Internet browser, and co-founder of Netscape and Andreessen Horowitz

"This is a masterful historical and conceptual analysis of the Three Player Game between the state, private entrepreneurial innovation and financial capitalism. The state has a key role in funding scientific research that leads to innovation. Amply funded by financial capitalism, innovation is a source of long term growth. But speculative funding of innovation is also associated with asset and credit bubbles that end up in financial crashes. A Minsky-inspired synthesis of the financial excesses of Schumpeterian creative destruction, this book should be required reading for all."
Nouriel Roubini, Professor of Economics, New York University, and Chairman of Roubini Global Economics

"A revelatory exploration of the complex dynamics underlying the innovation economy and the inherent roles of speculation and waste as experienced by one of the great venture capitalists and political/economic thinkers of our age. This book provides a powerful framework for dealing with the economic challenges we are facing today. It couldn’t have come at a better time!"
John Seely Brown, Former Chief Scientist, Xerox Corp, and Director of Palo Alto Research Center (PARC)

"Janeway applies keen insights from his experience as a venture capitalist and creates a vision of the interaction between governments, financiers, and firms that shows what institutions society must develop to foster innovation. I believe that Doing Capitalism will help all of us, whether academics, private sector leaders, or government officials, to see beyond shallow political dogma and move to a deeper understanding of challenges of technological advance."
George Soros, Chairman of Soros Fund Management

"… a tour de force with a solid thesis, excellent writing and exposition, and a history that too many have forgotten … or never knew. Brilliant!"
John C. Bogle, Founder of Vanguard Funds

"If you have ever wondered what the interplay of government, bubbles and venture capital have to do with innovation, this is the book for you … Doing Capitalism in the Innovation Economy is rich in historical references and stories, wise in its philosophy, deep in its evaluation and observation; and a tribute to the life’s work of an important investor and constructive thinker. This book is outstanding and deserves your time."
Wall Street Oasis (

Kirkus Reviews
A rewarding memoir about the learning, training and life experience required to achieve mastery in the venture economy. Warburg Pincus senior advisor Janeway debuts with this account of the implications of relatively less-discussed aspects of the economic theories of John Maynard Keynes, including his interest in investment and speculation and views of the fallibility of human judgment. The author reviews several main strands in the development of contemporary economic theory and shows where their advocates have gone off the rails or worse. His frame is provided by what he calls "three sets of continuous, reciprocal, interdependent games played between the state, the market economy and financial capitalism." Janeway asserts that modern market orthodoxies are absolutely wrong, that there is no such thing as a hedge for any investments, that bubbles have beneficial effects as well as unpleasant ones, and that "cash and control," not debt, are key at all levels to offset the dangers of illiquidity crises. The author's own career provides the context for a much broader discussion of the history of scientific and technological innovation in relation to the development of market-based economies. He shows that only the state can sponsor the outcome-independent commitment to basic science that makes economic innovation possible, but which also requires investment best mobilized through stock markets. Interestingly, Janeway argues that what became known in the 19th century as the "American System," associated with Alexander Hamilton, remains the most effective political organization for the three-player game. A well-written, occasionally humorous book most appropriate for specialists but useful for general readers as well.
Read More Show Less

Product Details

  • ISBN-13: 9781107031258
  • Publisher: Cambridge University Press
  • Publication date: 10/8/2012
  • Pages: 344
  • Sales rank: 791,628
  • Product dimensions: 6.30 (w) x 9.10 (h) x 1.00 (d)

Meet the Author

William H. Janeway has been an active venture capital investor for forty years. In particular, he built and led the Warburg Pincus Technology Investment team that provided the financial backing to a series of companies which made critical contributions to building the internet economy. He received his PhD in Economics from the University of Cambridge, where he founded the Cambridge Endowment for Research in Finance, and is a Teaching Visitor in the Princeton University Economics Department. He is a member of the Board of the Social Science Research Council and of the Institute for New Economic Thinking. In September 2012 he was granted the honorary honour of Commander of the Order of the British Empire (CBE) by HM the Queen 'for services to education in support of Cambridge University and to UK/US relations'.
Read More Show Less

Table of Contents

Introduction; Part I. Learning the Game: 1. Apprenticeship; 2. Discovering computers; 3. Investing in ignorance; Part II. Playing the Game: 4. The financial agent; 5. The road to BEA; 6. Apotheosis; Part III. Understanding the Game: The Role of Bubbles: 7. The banality of bubbles; 8. Explaining bubbles; 9. The necessity of bubbles; Part IV. Understanding the Game: The Role of the State: 10. Where Is the state?; 11. 'The failure of market failure'; 12. Tolerating waste.
Read More Show Less

Customer Reviews

Average Rating 5
( 1 )
Rating Distribution

5 Star


4 Star


3 Star


2 Star


1 Star


Your Rating:

Your Name: Create a Pen Name or

Barnes & Review Rules

Our reader reviews allow you to share your comments on titles you liked, or didn't, with others. By submitting an online review, you are representing to Barnes & that all information contained in your review is original and accurate in all respects, and that the submission of such content by you and the posting of such content by Barnes & does not and will not violate the rights of any third party. Please follow the rules below to help ensure that your review can be posted.

Reviews by Our Customers Under the Age of 13

We highly value and respect everyone's opinion concerning the titles we offer. However, we cannot allow persons under the age of 13 to have accounts at or to post customer reviews. Please see our Terms of Use for more details.

What to exclude from your review:

Please do not write about reviews, commentary, or information posted on the product page. If you see any errors in the information on the product page, please send us an email.

Reviews should not contain any of the following:

  • - HTML tags, profanity, obscenities, vulgarities, or comments that defame anyone
  • - Time-sensitive information such as tour dates, signings, lectures, etc.
  • - Single-word reviews. Other people will read your review to discover why you liked or didn't like the title. Be descriptive.
  • - Comments focusing on the author or that may ruin the ending for others
  • - Phone numbers, addresses, URLs
  • - Pricing and availability information or alternative ordering information
  • - Advertisements or commercial solicitation


  • - By submitting a review, you grant to Barnes & and its sublicensees the royalty-free, perpetual, irrevocable right and license to use the review in accordance with the Barnes & Terms of Use.
  • - Barnes & reserves the right not to post any review -- particularly those that do not follow the terms and conditions of these Rules. Barnes & also reserves the right to remove any review at any time without notice.
  • - See Terms of Use for other conditions and disclaimers.
Search for Products You'd Like to Recommend

Recommend other products that relate to your review. Just search for them below and share!

Create a Pen Name

Your Pen Name is your unique identity on It will appear on the reviews you write and other website activities. Your Pen Name cannot be edited, changed or deleted once submitted.

Your Pen Name can be any combination of alphanumeric characters (plus - and _), and must be at least two characters long.

Continue Anonymously
Sort by: Showing 1 Customer Reviews
  • Anonymous

    Posted January 3, 2013

    No text was provided for this review.

Sort by: Showing 1 Customer Reviews

If you find inappropriate content, please report it to Barnes & Noble
Why is this product inappropriate?
Comments (optional)