Financial Markets

Should owners or "society" determine how the corporation is managed?

It's time to start thinking of the stock market as a giant S&L. Money continues to pour in, despite a bounty of evidence that the extraordinary gains of the last few years cannot be enjoyed in the near future. The perception has never been stronger that the stock market is the right place to be for your long-term investment needs.

The new QJAE asks: in what ways are they alike?

Making lots of money is evil say the politically correct. It's sleazy, socially destructive, and almost always immoral, unless profits are given away to left-wing lobbying groups. Typical of this trendy disgust with getting rich through capitalistic means is Socially Responsible Investing (SRI), a nebulous set of investing standards embracing a host of "progressive" political causes.

They should have called it the Federal Advisory Panel for a Huge and Sneaky Tax Increase and a Massive Increase in Corporate Welfare. That—and not "privatization"—is the real upshot of what the advisory counsel to fix Social Security recommended.

A wealthy broker of questionable repute is trying to sell a mutual fund. If it stock goes up, he says, you profit. If it goes down, he adds, he'll send you a personal check to put it back on par with the original purchase price. He promises do this forever. Thus its value can't decline, no matter how much you buy.

In 1994, bondholders lost hundreds of billions, thanks to Clinton's monetary escapades. What happened? It's a sad story of interest rates and their manipulation by government planners.

The broadly held corporation was one of the most important developments of the 19th century. The capital of thou­sands and then millions of stockholders made possible the profitable development of large firms, which enriched not only their owners, but society as a whole.

Quick: what do the following world-famous men have in common: John Kenneth Galbraith, Donald J. Trump, and David Rockefeller? What values could possibly be shared by the socialist economist who got rich by writing best-selling volumes denouncing affluence; the billionaire wheeler-dealer; and the fabulous head of the financially and politically powerful Rockefeller World Empire? 

The market economy is under relentless and heavy criticism. Some of these criticisms are due to ignorance. Some, however, show a remarkably high degree of skill and sophistication. This book is devoted to a critical evaluation of some of the...