When we think about the economy, we tend to think about stuff. Physical goods are manufactured and sold, factories are built and upgraded, innovation gives us shiny new gadgets we can hold in our hands.

But this is becoming a less and less accurate way of thinking about things. Increasingly, intangible assets are what matter.

According to Jonathan Haskel and Stian Westlake, the authors of the brilliant Capitalism Without Capital, these intangible assets don’t play by the basic laws of economics. And so the rise of assets you can’t touch, they argue, is having a big impact on how the economy works.

Haskel and Westlake start with a simple, even obvious, insight and end with an important and thoughtful book about the nature of the modern economy. Their work has received high praise from high places. Bill Gates calls Capitalism without Capital “required reading for policymakers”.

For this week’s episode of free exchange, I spoke to Stian about his book, which is out now in paperback, and the implications of the ideas contained within it.

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