O capitalismo em questão

Capitalism in Question, por Chris Dillow:

The jump in share prices in response to the de facto nationalization of Fannie and Freddie suggests the markets agree with your Marxist correspondent - that mortgage financing is a job better done by the state.

This episode, however, does more that merely corroborate the old jibe that, in a financial crisis, everyone’s a left-winger. It makes us ask: what’s the point of stock market capitalism?

(...)

Nor does the stock market impose a discipline upon companies via the threat of takeover. Recent research confirms that inefficient firms are no more likely to be taken over than efficient firms.

With this discipline lacking, quoted firms are frequently badly managed. The experience of retailers confirms this. Whilst employee-owned firms such as John Lewis and Waitrose thrive, the shares of several quoted retailers have been falling for years: DSG, Debenhams, HMV for example. Which suggests, again, that markets are sceptical of the merits of stock market capitalism.

Academic research corroborates this. It shows that employee share ownership can raise productivity - which suggests that, at least within a certain range, outside ownership reduces it.

Of course, there’s a huge objection to all this - state-owned firms are hideously inefficient. But the reply to this was made by John Stuart Mill:

Government management is, indeed, proverbially jobbing, careless, and ineffective, but so likewise has generally been joint-stock management. (Principles of Political Economy, V.11.34)

Mill’s point was that the separation of ownership from control, whether in the public or private sector, is an enemy of good management; the fate of Fannie and Freddie corroborates this.