The 11 crucial books that explain modern capitalism

Jim EdwardsJan 10, 2021, 19:22 IST

Capitalism: It's worth understanding how it actually works.Peter Dazeley / Getty Images

These classic books tell how modern capitalism in Europe and the US changed from a system that manufactured actual products into a financialized trading desk for credit derivatives and leverage.
They also describe the how modern inequality developed.
And they are all absolutely riveting.

Fifty years ago, capitalism in the West was based on manufacturing which provided well-paid, lifelong jobs and close to full employment. By the 1970s and 1980s that system was carrying a layer of credit and debt that made it more lucrative for banks to extract profits from deals and transactions than to provide finance for the creation of actual products.

Then, in the 1990s, the burgeoning tech industry made physical products even less relevant - and even more lucrative for investors and speculators.

These classic non-fiction books tell the story of how modern capitalism in the West changed from a system that made actual things into a trading desk for bonds, credit derivatives, and leverage ... and created modern inequality along the way.

We've arranged the books chronologically according to the period of history they cover. If you read them in this order you'll see how one segues into the next, and how dramatically capitalism has changed in the last 50 years.

LORDS OF FINANCE: 1929, The Great Depression, and the Bankers who Broke the World

Windmill Books

RANK AND FILE (1973): The brutal, forgotten history of ordinary people who faced down death threats to get decent pay and safety standards at work.

The Observer Reporter

BARBARIANS AT THE GATE (1989): An epic thriller about '80s excess, a time when debt financing replaced manufacturing as capitalism's main focus.

James Garner as the CEO of RJR Nabisco in the movie version of "Barbarians at the Gate." Columbia Pictures

LIAR'S POKER (1989): The classic tale of life inside Salomon Brothers that defined how stories about Wall Street are told.

Author Michael Lewis gestures during an interview at Reuters in 2014. REUTERS/Lucas Jackson

DEN OF THIEVES (1991): An account of the heydey of insider trading that shows how easily debt financing can be manipulated.

Michael Milken in his heydey. Gerald Herbert/AP

THE NEW NEW THING (1999): The ne plus ultra tale of dot-com bubble excess, set aboard the yacht of a Silicon Valley millionaire who may not know exactly what he is doing.

Jim Clark with one of his boats. Royal Huisman

THE NEW NEW THING (1999): The *ne plus ultra* tale of dot-com bubble excess, set aboard the yacht of a Silicon Valley millionaire who may not know exactly what he is doing.

WHEN GENIUS FAILED (2000): Roger Lowenstein's awesomely sourced account of the rise and fall of Long-Term Capital Management, a hedge fund that placed disastrous leveraged bets on the bond markets.

Penguin

WHEN GENIUS FAILED (2000): Roger Lowenstein's awesomely sourced account of the rise and fall of Long-Term Capital Management, a hedge fund that placed disastrous leveraged bets on the bond markets.

NICKEL AND DIMED (2001): A rare, detailed look at the real lives of the modern poor.

Nickel And Dimed

THE BIG SHORT (2010): The scale of the 2008 financial crisis was unseen since the depression of 1929. Only a handful of people saw it coming ...

Margot Robbie narrates the movie version of The Big Short. The Big Short

CAPITAL IN THE TWENTY-FIRST CENTURY (2013): Thomas Piketty's masterpiece on the roots of modern inequality.

French economist and academic Thomas Piketty attends a symposium "Les Entretiens du Tresor" at the Bercy Finance Ministry in Paris January 23, 2015. REUTERS/Charles Platiau

THE SPIDER NETWORK (2017): The grueling account of how Tom Hayes, a banker with Asperger's Syndrome, came to be at the center of the LIBOR interest-rate rigging scandal.

Tom Hayes arrives at Southwark Crown Court with his wife Sarah, in London, August 3, 2015. Reuters

THE SPIDER NETWORK (2017): The grueling account of how Tom Hayes, a banker with Asperger's Syndrome, came to be at the center of the LIBOR interest-rate rigging scandal.

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The 11 crucial books that explain modern capitalism

LORDS OF FINANCE: 1929, The Great Depression, and the Bankers who Broke the World

RANK AND FILE (1973): The brutal, forgotten history of ordinary people who faced down death threats to get decent pay and safety standards at work.

BARBARIANS AT THE GATE (1989): An epic thriller about '80s excess, a time when debt financing replaced manufacturing as capitalism's main focus.

LIAR'S POKER (1989): The classic tale of life inside Salomon Brothers that defined how stories about Wall Street are told.

DEN OF THIEVES (1991): An account of the heydey of insider trading that shows how easily debt financing can be manipulated.

THE NEW NEW THING (1999): The *ne plus ultra* tale of dot-com bubble excess, set aboard the yacht of a Silicon Valley millionaire who may not know exactly what he is doing.

WHEN GENIUS FAILED (2000): Roger Lowenstein's awesomely sourced account of the rise and fall of Long-Term Capital Management, a hedge fund that placed disastrous leveraged bets on the bond markets.

NICKEL AND DIMED (2001): A rare, detailed look at the real lives of the modern poor.

THE BIG SHORT (2010): The scale of the 2008 financial crisis was unseen since the depression of 1929. Only a handful of people saw it coming ...

CAPITAL IN THE TWENTY-FIRST CENTURY (2013): Thomas Piketty's masterpiece on the roots of modern inequality.

THE SPIDER NETWORK (2017): The grueling account of how Tom Hayes, a banker with Asperger's Syndrome, came to be at the center of the LIBOR interest-rate rigging scandal.

THE NEW NEW THING (1999): The ne plus ultra tale of dot-com bubble excess, set aboard the yacht of a Silicon Valley millionaire who may not know exactly what he is doing.