Towards an Elite Theory of Economic Development

This profoundly ambitious theoretical work centers on ‘value,’ understood as everything humans deem worth appropriating. Every society is hierarchical, and the top echelons are dominated by elites, the quality of which—in the business, politics, and knowledge arenas—determines economic and human development. All elites run elite business models that both create and extract value, originate or transfer risk, and use their power and agency to shape institutions. This book argues that when inclusive value creation outweighs extractive value transfers, the outcomes for society at large are positive. Sustainable value creation happens when intra-elite contests result in more innovation than rent seeking, more free trade than protectionism, and more competition than monopolies.
Leveraging diverse ideas from economics (value), sociology (power), political economy (the distribution of value), and management (the value creation and appropriation framework), the book advances a sweeping inter-disciplinary framework that positions the meso-level elite system at its core. This extends the institutional perspective and acts as the transmission mechanism between the micro-level firm and the macro-level political economy. A wealth of elite business model cases are considered throughout its pages—ranging from Neolithic grain to AI and from Caesar to Trump—to further an elite theory of economic development that transcends traditional Left–Right debates, is rooted in its own speculative philosophy, and yet is highly practical, with proposals for structural reform, cost of equity calculations, and an approach to sustainability based on weighting and offsetting extractive transfers. This economic treatise supplies the conceptual tools for a realistic account of how the world works today and, in its discussion of elite judgment, offers an ethical framework to guide elite transformational leadership. It will be essential reading for researchers, policymakers, and business leaders around the world looking for fresh ideas on how to navigate and reappraise how we address current realities.

Tomas Casas-Klett is a permanent faculty member at the University of St.Gallen’s School of Management (SoM), Institute for International Management and Diversity Management (IIDM-HSG), the Director of its China Competence Center, and serves as a visiting Professor at leading universities in Asia, including the Tsinghua University’s School of Economics and Management and the Hong Kong University of Science and Technology. His research centers on economic development, geopolitics and the global political economy, elite leadership and top teams, international business and entrepreneurship, and how sustainable value creation affects the cost of equity and debt. He is also the co-founder and co-editor of the Elite Quality Index (EQx) and the Value Creation Rating (VCr) annual reports which respectively measure the sustainable value creation of nations and of firms.
Tomas holds a BSc in finance from the Wharton School at the University of Pennsylvania, an MSc in management from Fudan University in Shanghai, and a PhD in economics from the University of St.Gallen, Switzerland.