Comments on: Will the British electorate decide who runs the country in 2010?

By: The unjust poetics of Stephanie Flanders « Though Cowards Flinch

The unjust poetics of Stephanie Flanders « Though Cowards Flinch — Sun, 14 Mar 2010 09:00:06 +0000

[...] here, here, here, here, here and here, for example. Oh, and here and here. I first wrote about it on 30 July [...]

By: Icelandic dilemma « Freethinking Economist

Icelandic dilemma « Freethinking Economist — Fri, 08 Jan 2010 10:47:21 +0000

[...] People can move (and many would happily take educated Icelanders). On the other hand ThoughCowardsFlinch seemed outraged that the cost of our future debt may determine the next election, but why should the rights of [...]

By: james

james — Wed, 06 Jan 2010 16:09:39 +0000

Barney, I agree we should give up, though I must say, it’s been an interesting nowhere! Anyway, all the best.

By: Barney Stannard

Barney Stannard — Wed, 06 Jan 2010 00:01:25 +0000

James: thanks for the references. To be honest we’re getting nowhere. We haven’t been for a while. I suggest we give up.

Dave: yes and no. Yes we may be kind of buggered, but no not as you think. The (possible) decrease in demand for T-bills isn’t reflective of the risk of the US defaulting. Quite why its happening I don’t know: something to do with the end of quantitative easing making treasuries a sure fire winner, the recovery of other markets and the risk of inflation. This last is the key. The US will never default, but it may inflate its way out of problems. Just 5% inflation p.a. can take a whack off your investment.

By: james

james — Tue, 05 Jan 2010 22:22:40 +0000

1) You might be interested in William Davies book “Reinventing the Firm” and Cliff Mills “Funding the future”, which explain far better than I ever could why ownership matters to sustainability and productivity.

2) I don’t recall advocating a ban on selling ownership, I’ve just suggested that for the sake of economic stability, long-term ownership is important just as for the sake of justice, ownership by working people is important.

By: Dave Semple

Dave Semple — Tue, 05 Jan 2010 20:16:51 +0000

My understanding of all this is fairly limited, but if organisations are divesting themselves of the US government debt then, on the basis that there’s a danger of defaulting, isn’t the entire global economy buggered anyway? Do we even have a frame of reference for such a thing?

By: Barney Stannard

Barney Stannard — Tue, 05 Jan 2010 20:12:18 +0000

For Paul if you are watching, PIMSCO – the world’s largest bond trader – is to cut holdings of UK and US treasuries. The first crack? or a minor adjustment? Hopefully the latter…

By: Barney Stannard

Barney Stannard — Tue, 05 Jan 2010 20:10:30 +0000

1) Your evidence for a system wide theory that your model is more stable than capitalism is the performance of one industry in one two year period? The two sets of institutions don’t even do the same types of things.

But that is beside the point – even if they were homogenous entities other than ownership, their respective performances over 100 years would be scant evidence (at best) that your sytem would work on a macro scale.

2) You are forgiven – because you are not wrong, but missing half the picture. A lot of companies, great and small, raise capital through sale of equity (ever watched Dragons Den?). If you ban that then firms would have to leverage even higher to get the same rate of growth. I’m guessing you don’t want that.

There is of course an argument that debt and equity are the same. In theory this maybe holds. In practice, however… I’m no great corporate finance buff, but in practice it always seems easier to me for troubled firms to cut dividends then re-negotiate debt payments. But I must admit to being no expert on this.

As an aside – why do you think there is an equities market? Other than the greed of the capitalist that is.

By: james

james — Mon, 04 Jan 2010 23:50:16 +0000

Barney, I’ve already said that I believe that ownership structures matter when it comes to endogenous shocks and cited the example of the mutually-owned versus shareholder-owned financial institutions.

How do small companies currently access capital? From banks in the form of loans. I was under the impression, forgive me if I’m wrong, that this is what currently happens for small businesses which are investor-owned but also for those enterprises which are mutual or cooperative in structure.

By: Barney Stannard

Barney Stannard — Mon, 04 Jan 2010 19:45:50 +0000

Thanks Paul, glad you’re enjoying the bar fight. I look forward to your articles.

James; the question on stocks was meant to elicit a bit more of a theory on how you see the economy working. Not detract from my main point about endogenous shocks and my belief that there is no evidence that a model of the kind you’re advocating would have any effect on them. I’ll take continued silence as confirmation of that.

On your rejection of stock market ownership, how do you plan for small companies to gain capital? Presumably through selling equity? Or are you only averse to selling ownership on public markets where there is transparency?

On the “you can’t split the two”. I get that economics is one: what’s the other. If its politics in the moral sense, then I think you’ll find you can. One normative, one scientific (quasi).