Making Money by Moving Money Around

Many companies have spent more time worrying about stock prices than about making valuable products.

WNYC is looking at the role of finance in the nation's economy. Rana Foroohar, in her book “Makers and Takers: The Rise of Finance and the Fall of American Business," explains how financial engineering isn't limited to Wall Street and the banking industry. As the sector has grown and become more profitable, many businesses have tried to emulate it through their own financial engineering.

The problem is that this practice can deny people products that could add value to their lives.

"At the end of the day, what we want companies to do is create value," said Gautam Mukunda, assistant professor at Harvard Business School. "You want them to do things that make the world richer."

Mukunda said value is created by discovering, inventing and building things — not by pushing up stock prices.

Mukunda joined WNYC's Jami Floyd and Charlie Herman to discuss how the hazards of focusing on a business' stock price and satisfying investors. This is the second interview in a three-part series. Here, you can listen to the first interview.