Hmm

Richard Murphy says:
February 1 2018 at 5:39 pm
No one is saying that the apical markets will cease to exist. Politely, stop being silly

But if you really think capital markets are efficient and work for the benefit of society as a whole, politely, stop being silly. The evidence that they do not is overwhelming. The costs they impose are staggering. And the state has a duty to correct market imperfection. Making sure capital gets to where it is needed is a way of doing that.

Just wonderin’ ‘n’all.

Where has got rich with the state allocation of capital?

20 comments on “Hmm

  1. Dear Mr Worstall

    How much richer shall we be after HS2 has sucked up all those billions?

    We should be told.

    DP

  2. The evidence that they do not is overwhelming. The costs they impose are staggering.

    Two big claims there which should be very easy to prove, but he doesn’t, and cannot.

  3. Free communication (through prices) and voluntary contracts “impose…staggering…costs” that give the state a “duty” to act in opposition? Yikes!

  4. Not a day goes by without Murphy being “staggered” or “overwhelmed” by something which, to my eyes, is rather obvious or trivial. The man’s talent for hyperbole is, well, staggering actually.

    How on earth can anyone function like that without having multiple strokes or heart attacks?

    And I hope I speak candidly here.

  5. No one is saying that the apical markets will cease to exist.

    Of course not. Why would we run out of bees?

  6. But if you really think capital markets are efficient and work for the benefit of society as a whole, politely, stop being silly.

    And what does benefit society as a whole? Richard Murphy running everything, evidently.

  7. Adam Smith would have levied a tax on the land value uplift that would have arisen from simple good governance.How would his laissez faire state have allocated this capital?
    . The answer is that landowners should keep all the land value uplift and when we have attained (as now)the democratic perfection of a homeowning democracy all the people (who matter) can live off something for nothing.

  8. Capital markets do not work for the *direct* benefit of society as a whole. That is their purpose. They work for the benefit of enterprises that provide an adequate return for the inherent risk in their businesses. The rest of society benefits from that.

  9. None of the following work to benefit society as a whole:

    A cricket club;
    The Gilbert and Sullivan Appreciation Society;
    The A1;
    Chocolate biscuits

    …and…so what?

  10. ‘But if you really think capital markets are efficient and work for the benefit of society as a whole’

    Wut? Why would they ‘work for the benefit of society as a whole?’

    ‘And the state has a duty to correct market imperfection. Making sure capital gets to where it is needed is a way of doing that.’

    Ahhh . . . government working for the benefit of society as a whole.

    Except what if they decide you are not where capital is needed? What if they decide unicorn farming is where it’s needed?

    Nothing is to be allowed if it doesn’t benefit society as a whole?

  11. Perhaps Prof Murphy could point us to the holy writ that states capital must operate “for wider society” as defined by people other than the capital’s owner.

    No? Then shut the fuck up. It’s Friday, I’ve had a pint and my tolerance for self-aggrandising accountants is at an all time low.

  12. “Where has got rich with the state allocation of capital?”

    Off the top of my head – 19th century Hokkaido

    A need to secure the northern border of the country saw the Meiji government demand economic development via railways and agriculture, including western farming practices that worked where Asian ones could not because of the climate. (Google “Boys be ambitious” for more of an explanation.)

    Gold and coal got found later, but it was all financed centrally to start with as the only activity that was there prior to it were the ethnic Ainu people in dressed in fish skins and living in mud huts.

    Closer to home…Milton Keynes, Manchester, in the form of Trafford Park Industrial Estate, as resultant policy of the IRA bombing, and the decision to move the BBC to Salford, (Much to the disgust of everyone who works for it) and last but not least, the London Borough of Newham and Tower Hamlets, in the form of hosting the results of the London Docklands Development Corporation, or as you and I know it, Canary Wharf.

  13. @ Rob
    Why on earth do you think that MCC doesn’t work to benefit society as a whole? It provides wholesome entertainment (unlike most TV or films) and encourages young boys and girls (mostly boys but a decent minority of girls) to take part and enjoy healthy exercise and social activities.
    Maybe I mean *the* decent minority …

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