[lbo-talk] A highly critical take on Fitch

Doug Henwood dhenwood at panix.com
Tue Mar 14 19:55:09 PST 2006


Nathan Newman wrote:


>Yes, the lack of direct bank
>ownership of equities in the 20th century made US corporate structures
>different from much of the world, but one of the results was precisely the
>mega-corporate structures where firms didn't even need much capital from the
>markets since they could raise it internally-- a point I believe a certain
>Doug Henwood has emphasized in questioning the centrality others have given
>to the role of Wall Street.

The fundraising role of Wall Street is exaggerated; its real function is the organization of ownership and disciplining management. I've got a paper around somewhere that points out that dispersed ownership, as in the predominantly English-speaking countries, is a more hostile environment for social democracy, since it's pitiless in its demands for cost-cutting and labor flexibility. Ownership in the soc dem countries is more concentrated. The comparison works for Canada and the US; Canada is both more concentrated and more social democratic.

Doug



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