Coin-Flip Capitalism

Jul 12, 2021

High-flying financial firms attract a disproportionate share of the nation’s business talent, fund lavish compensation through fees charged to public pension funds and non-profit endowments, and shape the behavior of companies in the real economy. Yet their status as a political football prevents examination of what they really accomplish—one side happily vilifies them simply because they represent capital, while the other grants them praise on the presumption that profitable market activity is inherently valuable.

Coin-Flip Capitalism aims to help policymakers and the public better understand how the hedge fund, private equity, and venture capital industries function, what social and economic value they create or destroy, and how policy should respond. Wells King’s primer introduces the relevant topics and explains why they are subjects of public concern, while the Guide to Private Equity provides an in-depth exploration of the industry’s problems. Oren Cass lays out the key failures of modern financial markets and proposes a series of substantial reforms to shift capital toward productive investment, and Chris Griswold makes the empirical, pro-market case for a financial transaction tax. Finally, the Returns Counter aggregates financial returns data into a comprehensive set of quarterly performance benchmarks for each industry.