"Legendary economist Hyman Minsky identified author William H. Janeway as a 'theorist-practitioner' of financial economics; this book is an expression of that double life. Interweaving his unique professional perspective with political and financial history, Janeway narrates the dynamics of the innovation economy from the standpoint of a seasoned practitioner of venture capital, operating on the frontier where financial speculation intersects with novel technology. In this fully revised and updated edition, Janeway develops his theory that asset bubbles play a central role in financing technological innovation and that state investment in national goals enable the innovation process. Now, the Digital Revolution, sponsored by the state and funded by speculation, has matured to attack the authority, and even the legitimacy, of governments. The populist response in the West, especially in the United States, opens the door for China to seize leadership of the innovation economy from America"-- "The primary purpose of the book that follows was to explore how the evolutionary process of economic growth driven by technological innovation has depended upon the constructive, although often unwitting, collaboration of mission-driven state actors and financial speculators. Much of the most recent iteration of this process I lived as a working venture capitalist, while drawing on my education in the economics of John Maynard Keynes to grasp how state investment motivated by national security could trigger a productive bubble in the capital markets and radically accelerate the new economy in which we are all learning to live. The book comprises four parts. The first two offer a chronicle of how I simultaneously learned how the game works and how to play it. They serve as an on- ramp to the frontier of innovation, where progress is achieved through Darwinian processes of trial and error, subject to intense competitive pressure under conditions of uncertainty, even ignorance, about the consequences of action and the returns on investment"--