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Title page 1

Contents 2

KEY TAKEAWAYS 1

INTRODUCTION 3

THE EVOLUTION OF AMERICAN CAPITALIST INVESTMENT SYSTEM 4

Market Capitalism: 1788 to the Civil War 4

Owner Capitalism: the Civil War to the 1930s 4

Managerial Capitalism: 1930s to Late 1970s 5

Financial Capitalism: 1980s to the Present 6

DIVERGENCES BETWEEN THE SHORT-TERM PROFITS AND NATIONAL TECHNOECONOMIC POWER 11

Too Much Cash to Owners 12

Short-Termism 15

High Investment Hurdles 16

Too Little Investment in National Power Industries 17

Too Much Offshoring 18

Too Little Investment by Firms in Production 19

ALTERNATIVES TO FINANCIAL CAPITALISM 21

Chinese Party Capitalism 22

Coordination Capitalism 22

Worker Capitalism 22

TOWARD NATIONAL POWER CAPITALISM 24

Using the Tax Code to Foster National Power Capitalism 26

Spurring Private Vehicles to Support National Power Capitalism 28

Use the Bully Pulpit 28

Redefine Fiduciary Duty for Institutional Funds 30

Reduce the Power of Extractive Investors to Press Companies to Disgorge Cash 30

Have CFIUS Review Hostile Takeovers in National Power Industries 31

Spurring Public Vehicles to Support National Power Capitalism 32

Early Stage Capital Investors 32

Industrial Development Bank 32

CONCLUSION 33

ENDNOTES 35

Figures 12

Figure 1. Industrial power scale 12

Figure 2. Five places where profits can go 14

Boxes 11

Box 1. Defining National Economic Power Industries 11

Box 2. Where Should Profits Go? 14

Box 3. Chinese Competition and American Deindustrialization: A Financial Framework 20