When corporate economies are ruled by concentrated ownership, the responsibility for success or failure is primarily on those who own the controlling interest. WHen an economy is ruled by a stockmarket characterised by the dispersal of ownership throughtout the society, responsibility shifts. Members of the speculation economy typically treat their participation in American corporate capitalism as a private matter with their decisions to be made on the basis of their own self-interest and without much regard for the behaviour or decisions of others. But the nature and power of the speculation economy make the well-being of corporate America and, with it, the financial health of the nation, a matter of public concern. Most Americans participate in the speculation economy in one way or another. It is we who bear the responsibility for the consequences. It is we who create the demands of the market, who shape the incentives that drive corporate management. Perhaps the most important lesson of the history of the development of American corporate capitalism is that the continuing strength and health of the American corporate economy and thus American society requires market behaviour that encourages management to work for the long-term economic welfare of their businesses, their people and thus of the nation. Those incentives can only be provided by the market for, in the end, the market is the master.
The speculation economy is ours. It is what we make of it.
Wednesday, 6 May 2009
The Speculation Economy
From the last page of the book: