joint-stock company

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pages: 196 words: 57,974

Company: A Short History of a Revolutionary Idea by John Micklethwait, Adrian Wooldridge

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affirmative action, barriers to entry, Bonfire of the Vanities, borderless world, business process, Corn Laws, corporate governance, corporate social responsibility, credit crunch, crony capitalism, double entry bookkeeping, Etonian, hiring and firing, invisible hand, James Watt: steam engine, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, knowledge worker, laissez-faire capitalism, manufacturing employment, market bubble, mittelstand, new economy, North Sea oil, race to the bottom, railway mania, Ronald Coase, Silicon Valley, six sigma, South Sea Bubble, Steve Jobs, Steve Wozniak, strikebreaker, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, tulip mania, wage slave, William Shockley: the traitorous eight

One of the themes of Utopia Limited, or The Flowers of Progress, was not an obvious rib-tickler: the limited-liability joint-stock company. That night’s operetta made fun of the idea that companies were sweeping all before them, enriching investors as they went. An English company promoter named Mr. Goldbury arrives in the exotic South Sea Island of Utopia and sets about turning the inhabitants into companies. Even babies issue company prospectuses. At one point in the final act, the King of Utopia demands, “And do I understand you that Great Britain/Upon this Joint Stock principle is governed?” And Mr. Goldbury replies, “We haven’t come to that, exactly—but/We’re tending rapidly in that direction/The date’s not distant.” Soon afterward, the Utopians join in one of the most improbable choruses ever set to music: “All hail, astonishing Fact!/All hail, Invention new/The Joint Stock Company’s Act/The Act of Sixty-Two!”

The first is merely as an organization engaged in business: this definition, as we shall see, includes everything from informal Assyrian trading arrangements to modern leveraged buyouts. The second is more specific: the limited-liability joint-stock company is a distinct legal entity (so distinct, in fact, that its shareholders can sue it), endowed by government with certain collective rights and responsibilities. This was the institution that the Utopians’ “Astonishing Fact,” the Companies Act of 1862, unleashed, and which is still spreading around the world, conquering such obstinate refuseniks as the Chinese Communist Party and the partners of Goldman Sachs. Though this is primarily a book about the joint-stock company, it unapologetically strays into broader territory. From the beginning of economic life, businesspeople have looked for ways to share the risks and rewards of their activities.

The pamphlet, entitled Memoirs of the Twentieth Century, predicted that two giant companies would dominate the world in that far-off time: the Royal Fishery and the Plantation Company (to be founded by Frederick I and George III respectively).1 As a prophecy of the influence of companies two centuries away, this was oddly prescient—all the more so because Madden was polemicizing against a declining economic organization. Set beside partnerships and various forms of unincorporated companies, incorporated joint-stock companies (i.e., ones recognized by state statute) fared badly for the next century. The British and the French treated them with suspicion. “They are behind the times,” thundered one governor of Pennsylvania, “they belong to an age that is past.”2 New companies were chartered, of course; but the process of doing so was cumbersome. It was not until a combination of legal and economic changes from the 1820s onward that the modern company began to take shape.3 SLAVERS AND INDUSTRIALISTS In Britain, the prejudice against joint-stock companies created by the South Sea Bubble was later reinforced by scandals involving both the Charitable Corporation and the York Building Company.

 

Investment: A History by Norton Reamer, Jesse Downing

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Albert Einstein, algorithmic trading, asset allocation, backtesting, banking crisis, Berlin Wall, Bernie Madoff, Brownian motion, buttonwood tree, California gold rush, capital asset pricing model, Carmen Reinhart, carried interest, colonial rule, credit crunch, Credit Default Swap, Daniel Kahneman / Amos Tversky, debt deflation, discounted cash flows, diversified portfolio, equity premium, estate planning, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, family office, Fellow of the Royal Society, financial innovation, fixed income, Gordon Gekko, Henri Poincaré, high net worth, index fund, interest rate swap, invention of the telegraph, James Hargreaves, James Watt: steam engine, joint-stock company, Kenneth Rogoff, labor-force participation, land tenure, London Interbank Offered Rate, Long Term Capital Management, loss aversion, Louis Bachelier, margin call, means of production, Menlo Park, merger arbitrage, moral hazard, mortgage debt, Network effects, new economy, Nick Leeson, Own Your Own Home, pension reform, Ponzi scheme, price mechanism, principal–agent problem, profit maximization, quantitative easing, RAND corporation, random walk, Renaissance Technologies, Richard Thaler, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Robert Shiller, Sand Hill Road, Sharpe ratio, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spinning jenny, statistical arbitrage, technology bubble, The Wealth of Nations by Adam Smith, time value of money, too big to fail, transaction costs, underbanked, Vanguard fund, working poor, yield curve

Nevertheless, the beginning of democratization itself has been a dominant force in the history of investment, and we can trace its lineage to these developments. 64 Investment: A History THE EMERGENCE OF THE MODERN CORPORATE FORM The advent of the corporate form, as embodied in joint-stock companies, was a vital precursor to developing capitalism, greater economic progress, and widespread financing and ownership of commercial and industrial enterprises. While the focus of this chapter will be on the first Dutch and English joint-stock companies founded in the early seventeenth century, recall that the original precursor to the jointstock company appeared more than a millennium before—the Roman societas publicanorum. As mentioned in chapter 1, these entities were created to bid on and service the construction of public works, engage in tax farming (the government’s sale of the right to collect particular taxes to a private enterprise), and provide goods and services to the Roman government.

These sailors sought permission to engage in trade, and Ivan acquiesced, giving the sailors a missive to the English king as his official acceptance. Because King Edward VI died during the initial expedition, it was ultimately Mary I, Queen of England and Ireland, who issued a charter to the company in 1555.3 There are other early examples of joint-stock companies—for instance, one of the first investments by the European public in the natural bounty of the so-called New World was, in fact, a joint-stock company. On April 10, 1606, King James I granted a charter for the London Company. It was inspired by English envy of the Spanish, who found massive quantities of precious metals in the New World. As a condition of the charter, King James I sought to cash in on what he hoped would be abundant profits and stated that one-fifth of the metal discoveries be ceded to the throne.4 The company was composed of 145 men who sailed from England to the New World between December 1606 and May 1607, making port in Virginia (hence the company’s later name, the Virginia Company).

In the end, of course, the fraudulent activities of Enron and Bernie Madoff are echoes of this forerunner some three centuries earlier. Adam Smith, the oft-cited “father of modern economics,” took an entirely adversarial view of the structure of the joint-stock companies The Democratization of Investment 69 and the notion of investment management more broadly. Of course, Smith was highly influenced by the South Sea Bubble collapse, and in The Wealth of Nations he wrote, “Negligence and profusion, must always prevail, more or less, in the management of the affairs of such a [joint-stock] company.” He claimed that the fiduciaries could not possibly be fully dutiful and completely concerned about the welfare of shareholders because the money is not their own: “The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in private copartner[ship] frequently watch over their own.”10 Adam Smith seemed to apply the famous principle of self-interest to the management of investment funds and, in so doing, deemed it a poor idea.

 

pages: 218 words: 63,471

How We Got Here: A Slightly Irreverent History of Technology and Markets by Andy Kessler

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Albert Einstein, Andy Kessler, automated trading system, bank run, Big bang: deregulation of the City of London, Bretton Woods, British Empire, buttonwood tree, Claude Shannon: information theory, Corn Laws, Edward Lloyd's coffeehouse, fiat currency, floating exchange rates, Fractional reserve banking, full employment, Grace Hopper, invention of the steam engine, invention of the telephone, invisible hand, Isaac Newton, Jacquard loom, Jacquard loom, James Hargreaves, James Watt: steam engine, John von Neumann, joint-stock company, joint-stock limited liability company, Joseph-Marie Jacquard, Maui Hawaii, Menlo Park, Metcalfe's law, packet switching, price mechanism, probability theory / Blaise Pascal / Pierre de Fermat, profit motive, railway mania, RAND corporation, Silicon Valley, Small Order Execution System, South Sea Bubble, spice trade, spinning jenny, Steve Jobs, supply-chain management, supply-chain management software, trade route, transatlantic slave trade, transatlantic slave trade, tulip mania, Turing machine, Turing test, William Shockley: the traitorous eight

Think of this when you buy 100 shares of Amalgamated Mogul in your E*Trade account. What Hakluyt couldn’t have possibly imagined, but alluded to, was that the stock market would be the great allocator of capital to these joint stock companies in such a way to constantly propel society forward on a vector of progress that no King could do on his own. It’s odd that a tool of mercantilism, the ability to raise risk capital on the expectation of returns by selling shares in a company, is today the backbone of capitalism. Joint stock companies were an interesting turning point for England. In Spain and France, the monarchies owned everything. In England, joint stock companies were almost a form of stock options. They extended property rights to individuals, AND provided a big fat carrot for the company to succeed. Individuals were empowered to create value, not for God and Country, but for themselves, which was Hakluyt’s point.

The Royal Exchange was up and running and needed stocks to trade. Hakluyt and others suggested that funds could be raised from England’s wealthy class. Elizabeth agreed and the joint stock company was born. Rather than be funded by the Crown or just one individual, capital instead would be raised from a large group of wealthy individuals, minimizing the risk for each. Elizabeth provided the license, FUNDING BRITISH TRADE 63 so to speak, but the markets, which were nothing more than the pooled wealth of Elizabeth’s wealthy subjects, provided the capital. Liquidity would be provided as shares of these joint stock companies traded hands on the Royal Exchange, or in private transactions out on “the Street.” In 1607, Hakluyt was still pitching his ideas for a fund to cover the costs of creating colonies, this time to James I, son of Mary Queen of Scots, who had taken over the monarchy after the death of Elizabeth.

With flooded mines (market demand), Watt’s condenser (technology), Boulton’s money (capital), Parliament’s patent (intellectual property rights), a ready workforce (religious persecution), and Wilkinson’s precise cylinders (technology), they had just about everything. What they were missing was a successful business model. It was Matthew Boulton who came up with one. Boulton and Watt didn’t actually sell steam engines since no one could afford one. Most of the early customers were Cornish mines. Beyond a few Parliament-sponsored joint-stock companies, the stock market and banking system were not quite developed, especially for risky businesses. Limited liability for corporations wouldn’t be the law until 1860. Miners lived day to day and used a cost book system of accounting (I slept through accounting, too.) At the end of each quarter, all the partners in the mine would meet at the Count House to go over the numbers and split any profits.

 

pages: 274 words: 66,721

Double Entry: How the Merchants of Venice Shaped the Modern World - and How Their Invention Could Make or Break the Planet by Jane Gleeson-White

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Affordable Care Act / Obamacare, Bernie Madoff, Black Swan, British Empire, carbon footprint, corporate governance, credit crunch, double entry bookkeeping, full employment, Gordon Gekko, income inequality, invention of movable type, invention of writing, Islamic Golden Age, Johann Wolfgang von Goethe, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, means of production, Naomi Klein, Ponzi scheme, shareholder value, Silicon Valley, Simon Kuznets, spice trade, spinning jenny, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, traveling salesman, upwardly mobile

Huge amounts of capital expenditure were required at the outset and they were raised not through profits but from private investors on stock exchanges at a 10 per cent dividend, and managed by joint stock companies. This form of collective investment had been used in Britain from 1600 by enterprises such as the East India Company to finance long and dangerous sea voyages. But a rash of speculation and spectacular losses brought its growth to an abrupt halt with the passing in 1720 of the so-called ‘Bubble Act’, which prohibited all joint stock companies not authorised by royal charter. When the Bubble Act was eventually repealed in 1825, a second and abiding era of joint stock activity dawned in Britain—and with it came the metamorphosis of bookkeeping into a new profession: accounting. Economist Basil Yamey argues that this was accounting’s formative moment: ‘Indeed, it might be claimed that the joint stock company was responsible for the transformation of book-keeping into accounting and for the profession of accountancy.’

The concept of ‘limited liability’—which protected investors from the losses incurred by the organisations in which they had invested—was another accounting issue raised by the joint stock company. Limited liability soon became a legally required characteristic of the corporation and made the distinction between capital and income a legal necessity. It was specifically allowed for in France in the Commercial Code of 1807, and in Scotland and Ireland around the same time. But it did not exist in England. As one English Lord put it in 1788, ‘the law of England is otherwise, the rule being that if a partner shares in the advantages, he also shares in all disadvantages’. Because of its traumatic first experiences of joint stock companies, early British corporate law provided for the unlimited liability of associates. (That is, investors were liable for the debts and losses of the businesses they had invested in.)

Crusades 16, 17, 18 currencies 100 da Gama, Vasco 29 da Pisa, Leonardo see Fibonacci da Vinci, Leonardo 7, 27, 32, 47, 60, 65, 80–2, 84, 87–8 Dafforne, Richard 120–3 Dandolo, Enrico 52 Dark Ages dark arts 35, 83 Darwin, Charles 139, 165 Das Kapital (Marx) 165 Dasgupta, Sir Partha 231–2, 237, 238, 239 Datini, Francesco 23–6, 52, 96 de’ Barbari, Jacopo 79 de’ Belfolci, Folco 34, 44 De divina proportione (Pacioli) 66, 82, 84, 85–6 De ludo scacchorum (Pacioli) 87–8 De pictura (Alberti) 60, 117 De quinque corporibus (Piero) 66 De viribus quantitatis (Pacioli) 83 Dean, Graeme W. 203 debit and credit entries 13, 55, 93–4, 100 difficulties 101–2, 122–3 The Decline of the West (Spengler) 167 Defoe, Daniel 127–8 della Francesca, Piero 7, 32, 34, 44–5, 46, 47 mathematical treatises 45, 66, 75 perspective painting 60, 64, 76–7 della Rovere, Giuliano 59 Deloitte, William 145 Deloitte Touche Tohmatsu 217 demand management 185 democracy 15 depreciation 148, 149, 231 Der moderne Kapitalismus (Sombart) 161–2, 171 derivatives market 198, 200 Descartes, René 40 d’Este, Isabella 83, 84, 88 dividends 144, 146, 147, 148, 149, 202 Doge’s Palace 50, 56 Domenici, Pete V. 191 domestic accounts 15–16 double-entry bookkeeping 8, 115, 120, 166 Badoer’s system 55 and capitalism 159–60, 161–75 and decision-making 126–7 earliest surviving 20–1 to improve the mind 125 link with rhetoric 172–3 in modern era 135–6, 249 origins 6–7, 16, 21–2 Pacioli’s definition 92–3 six essential features 20–1 texts on 117, 136 use by Datini 24, 26 Venetian 55, 67, 97–100, 123–7, 131 see also Particularis de computis et scripturis du Pont, Irénée 156 ducats 50, 55 Dürer, Albrecht 79–80 earnings per share (EPS) 219 earth see planet Earth Earth Summit 2012 248–9 East India Company 142 Ebbers, Bernie 213 eco-accounting 249 economic growth 192–3, 225, 227, 233, 242, 245, 248 economics 185 political economy 171 ecosystems 239–40, 247 education 245 Euclid’s Elements 37–8 quadrivium 36, 38, 43 trivium 38, 43 Egypt 35, 36 Eisenstein, Elizabeth 116–17 Elements (Euclid) 37–8, 39, 67, 68, 84 Elgin Marbles 15 Engels, Friedrich 162, 164, 165 England 116, 121, 131, 133, 147 Enron 3, 173, 194–9, 201, 207, 212–13, 214–16, 222–3 environmental accounting 233–8, 245, 247 environmental damage 222–3, 224–5, 232–3, 240, 241–2, 248 equity 21, 243 Erasmus of Rotterdam 68, 84–5 Erlich, Everett 235 Ernst & Young 209, 210, 216, 217 Espeland, Wendy Nelson 172–3 Euclid, Elements 37–8, 39, 67, 68, 75, 84 Eugenius IV, Pope 34 Europe 17, 20, 21, 22–3, 40, 116, 156, 188 accounting associations 153 currencies 25 medieval 26, 70–1 universities 30, 40, 42 vernacular languages 41 European Environment Agency 247 Evans, John H. 173–5 exchange rates 55 externalities 236 factory system 136–7, 138, 139–41, 165, 166 Farolfi ledger 20–1 Fastow, Andrew 213 Fells, J.M. 140–1 Fibonacci 18–19, 75 Fibonacci numbers 19–20 Liber abaci 19–20, 22, 39–41, 63, 66, 67, 75 Financial Accounting Standards Board (US) 206, 213 financial information 203–6 financial statements 5, 143, 144, 146, 200, 205, 214, 215 Fitoussi, Jean-Paul 243–4 Florence 6, 17, 34, 61, 64, 84 abbaco schools 41 bank ledger 20 expansion of commerce 21 Flugel, Thomas 127 Fondaco dei Tedeschi 56 Ford Motor Company 250–1 forests 240, 241 Forster, E.M. 154–5 Forster, Nathaniel 137 France 147 Franciscans 62, 65, 88, 89 Frankfurt Book Fair 95 Frederick II 95 Freiburg 27 Friedman, Milton 221 fund transfers 54 G20 249 Galileo 116, 166 Geijsbeek, John B. 157–8 General Electric 204 The General Theory of Employment (Keynes) 177–8, 179, 183, 185–6 Genoa 6, 17 geometry 36, 37, 38, 63, 73, 75, 81 Germany 56, 68, 183 Gertner, Jon 244 Giovanni, Enrico 244 Giovanni Farolfi & Co. 20 Glitnir 5 Global Biodiversity Outlook 3 (Sukhdev) global financial crisis (2008) 3, 5, 197, 215, 242, 243–4 globalisation, of finance 206–7, 219, 221 Goethe, Johann W. von 128–31 golden ratio 66, 86 Goodwin, Sir Fred 197 governmental accounting 120 grammar 38, 43 Great Depression 177, 178, 179, 180, 227 Greece, ancient 15 mathematics 34–5, 37–8, 61 philosophers 37 green accounting 244 Green Economy Report (Sukhdev) 248–9 Greenspan, Alan 227–8 Gross Domestic Product (GDP) 3, 180–2, 225, 227–30, 232–3, 235, 237–8, 242–3, 246 alternatives to 243–7, 249 failings of 246 Gross National Product (GNP) 1–3, 181, 190, 231 Groves, Eddy 208–9 Guidobaldo, Duke of Urbino 66, 72, 79, 92 Gutenberg, Johann 68, 77 Hagen, Everett 186 Hamilton, Alexander 22 Hammurabi’s Code 14 Haq, Mahbub ul 245 Henry VIII 25 Herodotus 36 HIH 208, 209, 213, 215 Hindu–Arabic arithmetic 34, 41, 62, 67 Hindu–Arabic numerals 18–19, 21, 26–7, 38, 44, 52, 71, 75 Hoenig, Chris 246–7 honeybee pollination 237 Hoover, Herbert 177 Hopwood, Anthony housework, unpaid 229 How to Pay for the War (Keynes) 182–3 Hudson, George 142–3 human capital 231, 248 Human Development Index 245 Humanism (Florence) 43–4, 59–60, 68 Huxley, Aldous 32–3 income measurement 218–19, 226 income statements 5, 202, 203, 219 in ancient Rome 16–17 see also profit and loss accounts India 29, 238 trade/double entry 22 Indonesia 240 industrial revolution 131, 133, 139, 200, 226 inflation 182, 183 information processing 203 Institute of Accountants and Bookkeepers of New York (IABNY) 156, 157 Institute of Chartered Accountants in England and Wales (ICAEW) 153, 205–6 Insull, Samuel 202, 214 Insull Utility Investments 201–2 interest payments 25, 54, 96 international accounting 189, 207 International Accounting Standards Board 207, 214 International Monetary Fund 187 internet 204 inventory 97–9, 101 Islam 22, 39 Italy 6, 7, 16, 19, 28, 167–8 mathematics 34–42, 62 Jerusalem 17 joint stock companies 133, 136, 142, 147, 148 Joint Stock Companies Act 1844 144, 149 Jones, Edward T. 133–6 Jones’ English System of Book-keeping 133–6 journal 99, 100, 101, 103, 118, 203 Julius II, Pope 59 Kennedy, Robert F. 1–3, 229–30, 246 Keynes, John Maynard 8, 176, 177–80, 182–7, 190, 250 Klein, Naomi 221, 233 KPMG 210, 214, 217 Kreuger, Ivar 201 Kreuger & Toll 201 Kublai Khan 18 Kuznets, Simon 2, 177, 180–1, 189, 229 Lanchester, John 4, 198 Landefeld, Steven 228 Landsbanki 5 Latin 35, 41, 63, 71, 72, 73, 74, 116, 220 Lawrence, D.H. 154–5 Lay, Kenneth 195, 196, 197, 212–13, 214 ledgers 20, 93, 99–100, 103–4, 118, 203 14th century 24, 93 Badoer’s 52, 55 balancing 111 closing accounts 111–13 Farolfi 20–1 Lee, G.A. 20–1 Lee, Thomas A. 203 Lehman Brothers 5, 216 Liber abaci (Fibonacci) 19–20, 22, 39–41, 63, 66, 67, 75 limited liability 147–8, 149 Littleton, A.C. 17, 140, 146, 147, 158–9 Liverpool and Manchester Railway 141 Lives of the Most Eminent Painters (Vasari) 46 Living Planet Survey 241–2 Lloyds-HBOS 5 London and North Western Railway 141 Louis XII 82 Machiavelli 30 Mackinnon, Nick 79–80 Madoff, Bernie 142 Madonna and Child with Saints 47 magic 35, 40, 83, 220 Mair, John 118, 125, 130 Malatesta family 33–4, 43 Malthus, Thomas 171 Manchester cotton mill (Engels) 165 Mandela, Nelson 221 Mantua 83, 84 manufacturing 136–41 manuscripts 61, 70, 77 Manutius, Aldus 84 Manzoni, Domenico 118–19 maritime insurance 53 Mark the Evangelist 51–2 marketplace, 15th century 95 markets, impact on politics 221, 228 mark-to-model 213 Marshall Plan 188 Marx, Karl 162, 163–5, 171 mass production 138 mathematics 7, 22, 28, 47, 89–90 ancient Greek 34–5, 37–8, 63 Arab 18–19, 63 and art 85–6 Hindu 39–40 in Italy 34–42 and magic 35, 40, 220 medieval European 63, 251–2 taught as astrology 29–30, 42 universal application 73, 116–17 see also arithmetic Mattessich, Richard 12–13, 186 Maurice, Prince of Orange 120 Maxwell Communications 207 McDonald’s 224 Meade, James 183–4 measurement 23, 218–19 Medici of Florence 26, 64, 80, 168, 171 Mehmed II 57 Mellis, John 121 memorandum (waste book) 99, 101, 118 entering transactions 105–7, 118, 122 merchandise 104 merchant bankers 21, 26, 69 merchants 10, 23, 35, 41 Arab 18–19, 25 Indian 22 Italian 40, 42 Phoenician 36 Venetian 18, 27, 55–6, 69, 94–5, 149 Mesopotamia 12, 13, 14 metaphysics 36–7 Middle Ages 60, 251–2 Milan 30, 34, 47, 61, 80–3 Millennium Ecosystem Assessment 239 Monsanto 222 Monteage, Stephen 124, 126 Morgan, John Pierpont 156 multiplication 74, 75–6 music 36, 38 Naples 50, 61–2 Napoleonic War 145 national accounts 175, 179–88, 190–3, 226–7, 230, 242, 244 natural capital 230–1, 235–9 navigation charts 23 Neighborhood Tree Survey (NY) 241, 244 Netherlands 119, 120 New Deal (Roosevelt) 177, 202 New York Light Company 155 New York Stock Exchange 155, 176, 201 New Zealand 153, 230 Nicholas V, Pope 61 No Royal Road: Luca Pacioli and his times (Taylor) 46–7 Nordhaus, William D. 180, 191, 227 numbers 37, 218, 219–20, 249 Obama, Barack 215, 246 O’Grady, Oswald 208 Oldcastle, Hugh 121, 124 Olmert, Michael 168 One.Tel 208, 209, 213, 215 Organisation for Economic Co-operation and Development (OECD) 190, 242 Organisation for European Economic Co-operation (OEEC) 188 Ormerod, Paul 244 Ottoman Empire 29, 34, 50, 51, 56, 57, 116 Pacioli, Luca 7, 8, 27–8, 34, 35, 161, 219 abbaco mathematics 40, 41 as academic 65, 80, 84, 89 astrologer 42 birth 30 bookkeeping treatise see Particularis de computis and Piero della Francesca 45–6, 47–8 education 43–8 encyclopaedia see Summa de arithmetica on Euclid 84–5 games/tricks 83–4 itinerant teacher 61–6 last years 88–90 and Leonardo da Vinci 80–2, 84 in Milan 80–3 portrait 47, 79–80 and the printing press 66–72 remembered in Sansepolcro 31–2 in Rome 58–61 in Venice 49–58 Paganini, Paganino de 67–8, 71–2, 78, 85 painting 60, 64, 81 Pakistan 224, 245 Paris 23, 50 Particularis de computis et scripturis (Pacioli) 29–30, 78, 90–114, 117–18, 121 and capitalism 163 foundation of modern accounting 30, 75, 131, 157–9, 166 profit calculation 146–7 partnerships 108–9, 147 Patel, Raj 222, , 224 Patient Protection and Affordable Care Act 2010 (US) 246 patronage 59, 67, 70, 72 Paul II, Pope 59 Payen, Jean-Baptiste 139–40 Peking 18 Perspectiva (Witelo) 64 perspective 23, 42, 45, 60, 64, 76–7, 80, 82 Perugia 62–3, 64, 65 Petty, William 180 phi 86 Philip VI 23 philosophy 37, 40 Phoenicians 36 pi 36 Piazza San Marco 56 Pinto cars 250–1 Pisa 6, 17 Pitcher Partners 209, 210, 211–12 plagiarism 63 planet Earth 8–9, 248 accounting for 254 effects of cost-benefit approach 175 health of 224–5, 239 Plato 37 Platonic solids 45, 79, 86 Pliny the Elder 16 pollution 244 Polly Peck International 207 Polo, Marco 18 Ponzi scheme 142 Postlethwayt, Malachy 124 poverty 237, 246, 248, 249 Prato 23–4 Price, Samuel 145 Price Waterhouse 201, 207 PricewaterhouseCoopers 217 principlism 173–4 printing 29, 45, 60, 63, 66–72, 77–8, 90, 115–17 profit 21, 24, 97, 102–3, 127, 146–8, 159, 161, 167, 169 profit and loss accounts 55, 109–11, 112, 166 Pythagoras 35, 36–7 quadrivium 36, 38, 43 quant nerds 220 railways 141–3, 231 Ramsay, Ian 211 Ratdolt, Erhard 68, 116 record-keeping 15 Reformation 33 regulation 206–14, 215 Reid Murray Holdings 207–8 religion 24, 96, 116, 124–5, 220 see also Christian Church; Islam Renaissance 7, 8, 23, 26, 36, 59, 80, 86, 89, 168 art 6, 7, 44, 60, 86 Resurrection (Piero) 32, 33 retained-earnings statements 5, 219 rhetoric 172–3 Rialto 50, 55, 108 Ricardo, David 171 Rich, Jodee 213 Rinieri Fini & Brothers 20 Ripoli Press 70 Robert of Chester 39 Rockefeller, John D. 156 Roman numerals 19, 26–7, 38, 40, 71, 116 Romantic poets, English 131, 154 Rome 58–61, 64, 89 ancient 15–16 Rompiasi family 57, 58, 97 Roosevelt, Franklin D. 177, 178, 181, 202, 214, 215 Rose, Paul L. 71 Ross, Philip 209–10, 211 Rothschild banks 133 Royal Bank of Scotland 173, 197–8 royal estate management 16–17 Rule of Three 38, 41 Russia 153–4 salt 51 Samuelson, Paul A. 191, 227 Sansepolcro 30–4, 43–4, 48, 65, 77, 88–9, 168 Sanuto, Marco 66, 72 Sarbanes, Paul 191 Sarbanes-Oxley Act 2002 212, 215 Sarkozy, Nicolas 242–3, 245 satellite accounts 234–5 scandals/fraud 194–203, 206, 207–12, 215, 225 Schmandt-Besserat, Denise 11–12 Schumpeter, Joseph 169–70 science 35, 37, 40, 42, 67, 76, 116, 166–7 Scotland 27, 147, 150, 153 Scott, Sir Walter 150–1 Scuola di Rialto 58 Second World War 32, 181–5, 187, 227 Securities and Exchange Commission (US) 202–3, 213, 214 Sen, Amartya 243–4, 245 Sforza, Ludovico 80, 81–2, 85, 86, 168 Sikka, Prem 216, 217 Silberman, Mark 213 Simons, James 220 Sistine Chapel 65 Sixtus IV, Pope 59 Skidelsky, Robert 178, 182, 187 Skilling, Jeffrey K. 196, 197, 212, 214 Smith, Adam 171 social sciences 171, 175 socialism 171 Society of Accountants, Edinburgh 152 Sombart, Werner 161–2, 164, 165–6, 166–8, 169, 170, 171–2, 173 Spain 22, 39 Spengler, Oswald 167 Sri Lanka 232–3, 240 State of the USA 246 Stevin, Simon 120, 121, 166, 169 Stiglitz, Joseph 243–4 Stiglitz-Sen-Fitoussi Commission 243–4 stock markets 143 stocktaking 166 Stone, Sir Richard 183–5, 188–9, 190 sub-prime mortgages Sukhdev, Pavan Summa de arithmetica (Pacioli) 57, 61, 62–3, 64, 72–7, 80, 82 printing 66–8, 71–2 publication 32, 77–9 sustainability 232, 243, 249 System of Integrated Environmental and Economic Accounting (UN) 234 System of National Accounts (UN) 189–90, 247 tabulae rationum 16 Taleb, Nassim N. 220 tariffs 63 Tartaglia, Nicholas 76 Taylor, R.

 

pages: 225 words: 11,355

Financial Market Meltdown: Everything You Need to Know to Understand and Survive the Global Credit Crisis by Kevin Mellyn

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asset-backed security, bank run, banking crisis, Bernie Madoff, bonus culture, Bretton Woods, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, cuban missile crisis, disintermediation, diversification, fiat currency, financial deregulation, financial innovation, financial intermediation, fixed income, Francis Fukuyama: the end of history, global reserve currency, Home mortgage interest deduction, Isaac Newton, joint-stock company, liquidity trap, London Interbank Offered Rate, margin call, market clearing, moral hazard, mortgage tax deduction, Northern Rock, offshore financial centre, paradox of thrift, pattern recognition, pension reform, pets.com, Plutocrats, plutocrats, Ponzi scheme, profit maximization, pushing on a string, reserve currency, risk tolerance, risk-adjusted returns, road to serfdom, Ronald Reagan, shareholder value, Silicon Valley, South Sea Bubble, statistical model, The Great Moderation, the payments system, too big to fail, value at risk, very high income, War on Poverty, Y2K, yield curve

England managed to put into use far greater sums of money than its rivals because it was far more credible at managing its public debt. As a result, it got to create the modern commercial and political world in its own image. JOINT-STOCK COMPANIES The global struggle for empire also caused the English and Dutch to develop the joint-stock company. Lou Dobbs informs us that ‘‘outsourcing’’ is a very bad thing. Actually, for most of history, governments outsourced just about everything, largely because of lack of money. The English, the Dutch, and the French got rich, private citizens to do things by selling them public offices and monopolies. Some things, however, were too big and risky for any individual to undertake. The first joint-stock companies were organized as trading companies to colonize the New World and Asia. Since the government wanted to control its colonies, such companies needed a charter from the crown.

Raising enough money to set up a colony was no small matter, but a monopoly charter helped close the sale with investors. The Virginian Company, the Dutch West India Company, the Dutch East India Company, the Hudson’s Bay Company, the East India Company, the Massachusetts Bay Company, and scores of other monopoly joint-stock companies were set up in the 1600s. A WORLD OF RISK European world domination was driven by joint-stock companies up to the middle of the nineteenth century. While not what we think of as a modern public company—i.e., the East India Company had its own ships, armies, and governed much of India—the early joint-stock company was the model for everything that followed. The investors swapped money for shares in the venture, shares they were free to sell to others. The investors were represented by a board of directors that 81 82 FINANCIAL MARKET MELTDOWN provided oversight to the paid managers who handled day-to-day business.

In the mean time, the board would periodically declare a dividend, so shares were also a source of income. Like government debt or ‘‘stock,’’ shares in the great English joint-stock companies soon came to be traded, again because their value went up and down with business and political conditions. In fact, they traded in the same place, the Royal Exchange. FINANCE LEARNS ENGLISH Stepping back, in the London of the 1690s, we can already see our modern financial ecology in embryo. A banking system based on bills of exchange was extending credit to merchants. Some merchants morphed into full-time bankers. There was an active market in government stock and the shares of joint-stock companies. Specialized middle men were starting to appear. Bill brokers took bills of exchange to the banks for discount. They traded bills among each other on the floor of the Royal Exchange, a great financial market hall built by Gresham.

 

The Corporation: The Pathological Pursuit of Profit and Power by Joel Bakan

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Berlin Wall, Cass Sunstein, corporate governance, corporate personhood, corporate social responsibility, energy security, Exxon Valdez, IBM and the Holocaust, joint-stock company, laissez-faire capitalism, market fundamentalism, Naomi Klein, new economy, race to the bottom, Ralph Nader, Ronald Reagan, shareholder value, South Sea Bubble, The Wealth of Nations by Adam Smith, Triangle Shirtwaist Factory, urban sprawl

The genius of the corporation as a business form, and the reason for its remarkable rise over the last three centuries, was-and is-its capacity to combine the capital, and thus the economic power, of unlimited numbers of people. Joint-stock companies emerged in the sixteenth century, by which time it was clear that partnerships, limited to drawing capital from the relatively few people who could practicably run a business together, were inadequate for financing the new, though still rare, large-scale enterprises of nascent industrialization . In 1564 the Company of the Mines Royal was created as a joint- stock company, financed by twenty-four shares sold for 00 each; in 1565, the Company of Mineral and Battery Works raised its capital Page 9 HE CORPORATION 9 by making calls on thirty-six shares it had previously issued. The New River Company was formed as a joint-stock company in 1606 to transport fresh water to London, as were a number of other utilities.' Fifteen joint-stock companies were operating in England in 1688, though none with more than a few hundred members.

Fifteen joint-stock companies were operating in England in 1688, though none with more than a few hundred members. Corporations began to proliferate during the final decade of the seventeenth century , and the total amount of investment in joint-stock companies doubled as the business form became a popular vehicle for financing colonial enterprises. The partnership still remained the dominant form for organizing businesses, however, though the corporation would steadily gain on it and then overtake it. In 1712, Thomas Newcomen invented a steam-driven machine to pump water out of a coal mine and unwittingly started the industrial revolution. Over the next century, steam power fueled the development of large-scale industry in England and the United States, expanding the scope of operations in mines, textiles (and the associated trades of bleaching, calico printing, dyeing, and calendaring ), mills, breweries, and distilleries."'

Corporations multiplied as these new larger-scale undertakings demanded significantly more capital investment than partnerships could raise. In postrevolutionary America, between 1781 and 1790, the number of corporations grew tenfold, from 33 to 328." In England too, with the Bubble Act's repeal in 1825 and incorporation once again legally permitted, the number of corporations grew dramatically, and shady dealing and bubbles were once again rife in the business world. Joint-stock companies quickly became "the fashion of the age," as the novelist Sir Walter Scott observed at the time, and as such were fitting subjects for satire. Scott wryly pointed out that, as a shareholder in a corporation, an investor could make money by spending it (indeed, he likened the corporation to a machine that could fuel its operations with its own waste): Page 10 Page 11 ... needy clerks, poor tradesman's apprentices, discarded service men and bankrupts-all have entered the ranks of the great monied interest.""

 

pages: 695 words: 194,693

Money Changes Everything: How Finance Made Civilization Possible by William N. Goetzmann

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Albert Einstein, Andrei Shleifer, asset allocation, asset-backed security, banking crisis, Benoit Mandelbrot, Black Swan, Black-Scholes formula, Bretton Woods, Brownian motion, capital asset pricing model, Cass Sunstein, collective bargaining, colonial exploitation, compound rate of return, conceptual framework, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, debt deflation, delayed gratification, Detroit bankruptcy, disintermediation, diversified portfolio, double entry bookkeeping, Edmond Halley, en.wikipedia.org, equity premium, financial independence, financial innovation, financial intermediation, fixed income, frictionless, frictionless market, full employment, high net worth, income inequality, index fund, invention of the steam engine, invention of writing, invisible hand, James Watt: steam engine, joint-stock company, joint-stock limited liability company, laissez-faire capitalism, Louis Bachelier, mandelbrot fractal, market bubble, means of production, money: store of value / unit of account / medium of exchange, moral hazard, new economy, passive investing, Paul Lévy, Ponzi scheme, price stability, principal–agent problem, profit maximization, profit motive, quantitative trading / quantitative finance, random walk, Richard Thaler, Robert Shiller, Robert Shiller, shareholder value, short selling, South Sea Bubble, sovereign wealth fund, spice trade, stochastic process, the scientific method, The Wealth of Nations by Adam Smith, Thomas Malthus, time value of money, too big to fail, trade liberalization, trade route, transatlantic slave trade, transatlantic slave trade, tulip mania, wage slave

See also market system iron industry, in eighteenth-century France, 381 iron mining: Chinese, 196; near Frobisher Bay, 314, 315 iron money, of Sichuan, 183–84 iron monopoly of Chinese state, 174 Irrational Exuberance (Shiller), 331–32 Ismail Pasha, 419–21 James II of England, 322 James River Company, 394 Jefferson, Peter, 389 Jiang Shang, 153, 154 Jiangsu Dasheng Group Company, 434 jiaozi, 184–85, 186 Jixia Academy, 155–57, 160–61 joint-stock companies: Age of Discovery and, 307; Bubble Act and, 380; in eighteenth-century England, 328, 338, 366, 380; Honor del Bazacle as, 300, 307; Muscovy company as, 309; in nineteenth-century China, 431–32, 437; Rotterdam insurance company as, 366. See also corporations Joint Stock Companies Act of 1856, 427 Jones, Alfred Winslow, 488–89 Jones, David, 117, 119 Jonker, Joost, 316 Jordan, Julius, 22–23 Jovanovic, Franck, 278, 279 J.P. Morgan: Chinese imperial government and, 435, 436; Wall Street crisis of 1907 and, 440; Wall Street’s image and, 470 Julian law, 107–8 Julius Caesar, 107–8, 124, 125 jurors, Athenian, 75, 85, 86, 90–91, 94, 95 Justinian (Byzantine emperor), 113 Justinian, Code of, 126, 127, 234–35 Kaifeng, 181, 183 kārum, 60, 61, 62–63 Kay, Philip, 128 Ketchum, Marshall, 504 Keynes, John Maynard: advocating investment in equities, 471, 473; on animal spirits, 404, 461–63, 464, 466; Bretton Woods Agreement and, 457–60; Crash of 1929 and, 485; Economic Consequences of the Peace, 454, 456–57, 461; The General Theory of Employment, Interest and Money, 460–63, 464, 466, 467; as investor, 463–65; portrait of, 455; sovereign debt problem and, 457–59; on state investment fund, 512; A Treatise on Probability, 464–65 knife coins, 158, 159, 185 Knights Templar.

One of the things that a charter might or might not foresee is a complete disaster. For example, the company experienced a severe setback in 1427, when its mills caught fire, and in 1709, the mill dam was destroyed by a flood. In these circumstances, shareholders were called on to contribute money to rebuild. In some cases, they did not have the funds. This is where two useful features of the joint-stock company become apparent. Shareholders could not be compelled to pay an unlimited amount. Instead, they had the option of surrendering their shares to the company and walking away. This is called “limited liability” and is a distinguishing feature of the modern corporation. It puts a floor on the downside risk that an investor faces. As such, it makes people willing to risk their capital in uncertain ventures.

Consider how different these companies were from the Honor del Bazacle, where investors could walk by their corporate assets every day. Toulouse shareholders of course knew there were risks of floods and fires, but these were at least probabilistically assessable, whereas trading ventures to the other side of the world—almost by definition—confronted the unknown. And yet, as we shall see, the joint-stock company corporate form, with tradable shares and separation between ownership and control, sufficed for both. The immediate question explored in this chapter is whether the corporate form made exploration possible, or whether the exigencies of exploration led to the independent development of the corporate form. Put another way, did financial innovation drive the Great Age of Discovery, or did the Great Age of Discovery drive financial innovation?

 

pages: 586 words: 159,901

Wall Street: How It Works And for Whom by Doug Henwood

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accounting loophole / creative accounting, affirmative action, Andrei Shleifer, asset allocation, asset-backed security, bank run, banking crisis, barriers to entry, borderless world, Bretton Woods, British Empire, capital asset pricing model, capital controls, central bank independence, corporate governance, correlation coefficient, correlation does not imply causation, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, dematerialisation, diversification, diversified portfolio, Donald Trump, equity premium, Eugene Fama: efficient market hypothesis, experimental subject, facts on the ground, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, George Akerlof, George Gilder, hiring and firing, Hyman Minsky, implied volatility, index arbitrage, index fund, interest rate swap, Internet Archive, invisible hand, Isaac Newton, joint-stock company, Joseph Schumpeter, kremlinology, labor-force participation, late capitalism, law of one price, liquidationism / Banker’s doctrine / the Treasury view, London Interbank Offered Rate, Louis Bachelier, market bubble, Mexican peso crisis / tequila crisis, microcredit, minimum wage unemployment, moral hazard, mortgage debt, mortgage tax deduction, oil shock, payday loans, pension reform, Plutocrats, plutocrats, price mechanism, price stability, prisoner's dilemma, profit maximization, Ralph Nader, random walk, reserve currency, Richard Thaler, risk tolerance, Robert Gordon, Robert Shiller, Robert Shiller, shareholder value, short selling, Slavoj Žižek, South Sea Bubble, The Market for Lemons, The Nature of the Firm, The Predators' Ball, The Wealth of Nations by Adam Smith, transaction costs, transcontinental railway, women in the workforce, yield curve, zero-coupon bond

Without the factory system that arises from the capitalist mode of production, cooperative factories could not develop. Nor could they do so without the credit system that develops from the same WALL STREET mode of production. This credit system, since it forms the principal basis for the gradual transformation of capitalist private enterprises into capitalist joint-stock companies, presents in the same way the means for the gradual extension of cooperative enterprises on a more or less national scale. Capitalist joint-stock companies as much as cooperative factories should be viewed as transition forms from the capitalist mode of production to the associated one, simply that in the one case the opposition is abolished in a negative way, and in the other in a positive way (Marx 1981, pp. 571-572) At the beginning of this excerpt, Marx seemed to be writing about the formation of modern corporations in the mid-19th century, a time of Robber Barons, scam artists, and financial panics — a process being repeated today in the so-called emerging markets of the Third World.

But furthermore, and quite apart from the class of idle rentiers thus created, the improvised wealth of the financiers who play the role of middlemen between the government and the nation, and the tax-farmers, merchants and private manufacturers, for whom a good part of every national loan performs the service of a capital fallen from heaven, apart from all these people, the national debt has given rise to joint-stock companies, to dealings in negotiable effects of all kinds, and to speculation: in a word, it has given rise to stock-exchange gambling and the modern bankocracy. trading Treasuries The market in U.S. government bonds is the biggest financial market in the world. At the center of the market are 38 major investment and commercial banks who are certified as primary dealers by the Federal Reserve INSTRUMENTS Bank of New York — the choice inner circle with which the Fed conducts its official monetary business.

[It appears] as a concentrated and organized mass, placed under the control of the bankers as representatives of the social capital in a quite different manner to real production (Marx 1981, pp. 490-491; emphasis in original). The modern owning class is formed in large part through the creation and trading of standardized claims on the wealth and labor of others. What do such owners contribute? In what Marx knew as a joint-stock company, and we know as the modern large corporation, not much. Unlike classical capitalists, who ran the operation and thus earned something like a wage of superintendence along with a share of the profits, today's managers are paid a (high) wage of superintendence, while the profits go mainly to outsiders. Of course that high managerial wage, even if it takes the form of a paycheck, still has to be considered mainly a share of profits.

 

pages: 585 words: 165,304

Trust: The Social Virtue and the Creation of Prosperity by Francis Fukuyama

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barriers to entry, Berlin Wall, blue-collar work, business climate, capital controls, collective bargaining, corporate governance, deindustrialization, Deng Xiaoping, deskilling, double entry bookkeeping, equal pay for equal work, European colonialism, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Gilder, glass ceiling, global village, hiring and firing, industrial robot, Jane Jacobs, job satisfaction, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, labour market flexibility, labour mobility, land reform, low skilled workers, manufacturing employment, mittelstand, price mechanism, profit maximization, RAND corporation, rent-seeking, Ronald Coase, Silicon Valley, Steve Jobs, Steve Wozniak, The Death and Life of Great American Cities, The Nature of the Firm, the scientific method, The Wealth of Nations by Adam Smith, transaction costs, transfer pricing, traveling salesman, union organizing

Some societies early on built bridges to other forms of sociability beyond the family. Beginning in the sixteenth century, for example, England and Holland created legal arrangements permitting the vesting ownership in larger groups, such as joint proprietorships, joint-stock companies, or limited liability partnerships. Besides allowing owners to capture the social returns from their investments, legal structures such as these allowed unrelated people to cooperate in the creation of a business. The contract and its associated system of obligations and penalties, enforced through a legal system, could fill in the gap where the trust naturally found in families did not exist. Joint-stock companies, in particular, allowed enterprises to grow in scale beyond the means of a single family by pooling the resources of a large number of investors. Historians of economic development like Douglass North and Robert Thomas assert that the creation of a stable system of property rights was the crucial development that permitted the process of industrialization to begin.5 In some countries like the United States, a system of property rights was established early on, such that family businesses were usually also incorporated as legal entities.

The economic historians Douglass North and Robert Thomas put it bluntly: “Efficient economic organization is the key to growth; the development of an efficient economic organization in Western Europe accounts for the rise of the West.”17 The development of transoceanic commerce in the fifteenth century depended on invention of the carrack, which could sail beyond coastal waters. But it also depended on the creation of the joint-stock company, by which individuals could pool their resources and share the risks entailed in funding great voyages. The extension of railroads across the continental United States in the mid-nineteenth century required large, hierarchically organized companies with geographically dispersed managers. The kinds of businesses that had existed previously were owned and operated by families. Not only could family businesses not keep the trains running on time; they could not keep them from running into one another on the same track, as occurred in an infamous accident that took place in 1841 on a line between Massachusetts and New York.18 Henry Ford made possible the mass-produced automobile at the beginning of the twentieth century by putting the chassis on a moving conveyor belt and then subdividing the work into easy, repeatable steps.

Historians of economic development like Douglass North and Robert Thomas assert that the creation of a stable system of property rights was the crucial development that permitted the process of industrialization to begin.5 In some countries like the United States, a system of property rights was established early on, such that family businesses were usually also incorporated as legal entities. But in other places, such as China, where there was little security of property rights, family businesses grew quite large without legal protection. Although legal arrangements like joint-stock companies and limited liability partnerships permitted unrelated people to cooperate with one another in business, they did not automatically lead to that result or to the extinction of family businesses. In many cases, family businesses incorporated under these laws and enjoyed the protection of their property rights but in other respects operated much as before. Virtually all American businesses were family businesses until the 183Os, despite the existence of a rather well-developed system of commercial law and a fledgling stock market.

 

pages: 649 words: 181,179

Diamonds, Gold, and War: The British, the Boers, and the Making of South Africa by Martin Meredith

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back-to-the-land, banking crisis, British Empire, Cape to Cairo, joint-stock company, Khartoum Gordon, Scramble for Africa, trade route

Buoyed up by their defeat of imperial Britain, the Transvaal Boers now set out to expand the borders of their state to the east and to the west, and to impose their will on African chiefdoms around them. PART III 10 THE DIAMOND BUBBLE A new bout of diamond fever struck southern Africa in 1881, prompted by the formation of a host of joint-stock companies in the diamond fields as the era of independent diggers came to an end. The rush to invest in joint-stock companies was as hectic as the original diamond rush of the 1870s. Speculators thronged the main diamond market in Ebden Street in Kimberley, where a new stock exchange was established to accommodate the huge increase in business: Ebden Street [wrote Dr Matthews] was filled from morning to night with a tumultuous and maddened crowd. The various offices of companies in formation were simply stormed, and those who could not get in at the door from the pressure of the crowd, threw their applications for shares (to which were attached cheques and bank notes) through the windows, trusting to chance that they might be picked up . . .

It was astonishing how the mania seized on all classes in Kimberley, from the highest to the lowest . . . how everyone, doctors and lawyers, masters and servants, shop-keepers and workmen, men of the pen and men of the sword, magistrates and I.D.B.s [illicit diamond buyers], Englishmen and foreigners, rushed wildly into the wonderful game of speculation. Following the launch of De Beers Mining Company in April 1880, more than seventy joint-stock companies made their debut on the market within a year. Claim-holders forming joint-stock companies made their own valuation of their assets, set the capital of the new enterprises, took shares equivalent to the value they claimed for their holdings and then offered the remainder to the public. As merchants and bankers in Cape Town and Port Elizabeth scrambled to join the buying frenzy, the competition for shares became so intense that stock in 1881 traded at premiums ranging as high as 300 per cent.

In the first four months of 1877, Jules Porges, a Paris-based diamond merchant, spent £90,000 buying up low-priced claims, giving him a 10 per cent interest in the Kimberley mine. Porges later teamed up with two Kimberley dealers, Sammy Marks and his brother-in-law, Isaac Lewis, who had turned their small trading business into a substantial mining company. In 1880 they merged their claims to form a joint-stock company, Compagnie Française des Mines des Diamants du Cap du Bon Espérance, otherwise known as the French Company. It controlled one-quarter of the Kimberley mine and was by far the largest mining operation on the diamond fields. Another major player was Joseph B. Robinson, a cold, cantankerous claim-owner notorious for his ill-temper, meanness, and proclivity for seducing other men’s wives and daughters.

 

pages: 355 words: 92,571

Capitalism: Money, Morals and Markets by John Plender

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Andrei Shleifer, asset-backed security, bank run, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, bonus culture, Bretton Woods, business climate, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collapse of Lehman Brothers, collective bargaining, computer age, Corn Laws, corporate governance, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, discovery of the americas, diversification, Eugene Fama: efficient market hypothesis, eurozone crisis, failed state, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, Fractional reserve banking, full employment, Gordon Gekko, greed is good, Hyman Minsky, income inequality, inflation targeting, invention of the wheel, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, labour market flexibility, London Interbank Offered Rate, London Whale, Long Term Capital Management, manufacturing employment, Mark Zuckerberg, market bubble, market fundamentalism, means of production, Menlo Park, moral hazard, moveable type in China, Nick Leeson, Northern Rock, Occupy movement, offshore financial centre, paradox of thrift, Plutocrats, plutocrats, price stability, principal–agent problem, profit motive, quantitative easing, railway mania, regulatory arbitrage, Richard Thaler, rising living standards, risk-adjusted returns, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, short selling, Silicon Valley, South Sea Bubble, spice trade, Steve Jobs, technology bubble, The Chicago School, The Great Moderation, the map is not the territory, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, tulip mania, Upton Sinclair, We are the 99%, Wolfgang Streeck

When the boom collapses, public outrage then prompts a political backlash in the shape of re-regulation. Consider the late seventeenth century. In Nicholas Barbon’s day, joint stock companies were a rarity, because incorporation required a Royal Charter or private Act of Parliament. Since incorporation was usually accompanied by the grant of privileges such as trading rights, monarchs and governments were very careful with their largesse. Yet, after the Glorious Revolution of 1688, when London was experiencing a big expansion of trade, especially with India, a more liberal attitude to incorporation prevailed. The formation of the South Sea Company in the new century, together with the stellar performance of its stock, accelerated an already powerful slew of incorporations, with 195 joint stock companies being formed in the year to August 1720. These were popularly known as ‘bubbles’.

A further difficulty with the way the banking system works is that the banks have become more dangerous over time. One reason is that, from the nineteenth century, banks began to abandon partnership and adopt limited liability. This was a big step because the unlimited liability associated with partnership acted as a tight control on imprudent behaviour. If a bank failed, creditors had recourse to all the personal assets of the individual partners. Once partnerships turned themselves into joint stock companies, the shareholders still enjoyed unlimited potential for gain but could never lose more than the amount they spent buying shares in the bank. This asymmetry was morally hazardous in that it encouraged greater risk taking. And in the nineteenth and twentieth centuries, commercial banks took more risks by extending their traditional deposit-taking and lending operations into investment banking and securities trading.

Scott Fitzgerald) 1 Great Illusion, The (Norman Angell) 1 Great Inflation (1970s) 1 Great Moderation 1, 2 Great Recession (2007–09) 1, 2, 3, 4, 5, 6, 7, 8 Greece (modern) 1, 2, 3, 4, 5 Greeks (ancient) 1, 2, 3 Green, David 1 Greenspan, Alan 1, 2, 3, 4, 5, 6, 7, 8 Greenwood, Robin 1 Grekova, Irina 1 Grice, Dylan 1 Griesinger, Georg August 1 Gulf of Mexico oil spill (2010) 1 Gusinsky, Vladimir 1 Gutenberg, Johannes 1 Haldane, Andrew 1, 2, 3, 4 Hamilton, Alexander 1, 2 Hamlet (Shakespeare) 1 Hammurabi 1, 2 Handel, George Frideric 1 Hard Times (Dickens) 1, 2, 3 Haydn, Joseph 1 Hayek, Friedrich 1 Healey, Denis 1 healthcare 1 Heaney, Seamus 1 Hegel 1, 2 Hinduism 1, 2 Hirsch, Fred 1 Hirschman, Albert O. 1 Hirst, Damien 1, 2 Holmes, Oliver Wendell 1 Hoover, Herbert 1 Hotel Manager, The (Irina Grekova) 1 Hudson, George 1 Hugh of Saint Victor 1, 2 Hughes, Robert 1, 2, 3 Hume, David 1, 2, 3 Hutcheson, Archibald 1 hyperinflation 1 IBM 1 Iceland 1 Impressionists 1 income tax 1 incorporation 1, 2 India 1, 2 indirect taxes 1 industrial shrinkage 1 industrial revolution 1, 2, 3, 4, 5, 6, 7, 8 inequality 1 Inferno (Dante) 1 inflation 1 institutional investors 1 intellectual property 1 International Monetary Fund 1 investment banking 1 Ireland 1, 2, 3 irrational exuberance 1 Islam 1 Italy 1, 2 art 1, 2 banking 1, 2 public debt 1, 2 taxation 1, 2 Ives, Charles 1 Jackson, Andrew 1, 2 Jackson Hole, Wyoming 1 James, Henry 1 Japan 1, 2 banks 1 bubble (1980s) 1, 2 industrialisation 1, 2 investment in China 1 manufacturing 1 Jefferson, Thomas 1, 2, 3 Jobs, Steve 1 Johnson, Ben 1 Johnson, Dr Samuel 1, 2, 3, 4, 5, 6, 7, 8 Johnson, Luke 1 joint stock companies 1 Joseph II, Emperor of Austria 1 JP Morgan 1 JPMorgan Chase 1 Judt, Tony 1 Jungle, The (Upton Sinclair) 1 Kafka, Franz 1 Kant, Immanuel 1 Katz, Richard 1 Kay, John 1, 2, 3 Kennedy, Paul 1 Kerr, Alex 1 Kerviel, Jérôme 1, 2 Keynes, John Maynard 1, 2, 3, 4, 5, 6 art 1, 2, 3, 4 debt 1, 2, 3, 4 family background and education 1, 2 gold standard 1, 2 speculation (participation) 1 speculation (views) 1, 2 Kindleberger, Charles 1, 2 King, Mervyn 1, 2 Knight, Eric 1 Knights Templar 1 knowledge 1 Koons, Jeff 1, 2 Krugman, Paul 1 Kuttner, Robert 1, 2 Kynaston, David 1 L’Argent (Zola) 1 L’Esprit Des Lois (Montesquieu) 1, 2 La Rochefoucauld 1 Laffer, Arthur 1 Lambert, Richard 1 Lanchester, John 1 Law, John 1 law of comparative advantage 1 Lawrence, D.

 

pages: 323 words: 92,135

Running Money by Andy Kessler

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Andy Kessler, Apple II, bioinformatics, British Empire, business intelligence, buy low sell high, call centre, Corn Laws, family office, full employment, George Gilder, happiness index / gross national happiness, interest rate swap, invisible hand, James Hargreaves, James Watt: steam engine, joint-stock company, joint-stock limited liability company, knowledge worker, Long Term Capital Management, mail merge, margin call, market bubble, Maui Hawaii, Menlo Park, Network effects, packet switching, pattern recognition, pets.com, railway mania, risk tolerance, Sand Hill Road, Silicon Valley, South China Sea, spinning jenny, Steve Jobs, Steve Wozniak, Toyota Production System

It had market demand (flooded mines), technology (Watt’s condenser and Wilkinson’s precise cylinders), capital (Boulton’s money), intellectual property rights (Parliament’s patent) and a ready workforce (ex-farmers). I was ready to invest—all that was missing was a business model. It was Matthew Boulton who came up with one. Boulton and Watt didn’t actually sell steam engines. No one could afford one. Most of the early customers were Cornish mines. Beyond Parliament-sponsored joint-stock companies, the stock market and banking were not quite developed, especially for risky businesses. Limited liability for corporations wouldn’t be the law until 1860. Miners lived day to day. They used a cost book system of accounting (I slept through accounting too). At the end of each 58 Running Money quarter, all the partners in the mine would meet at the countinghouse to go over the numbers and split any profits.

Stephenson and his son were asked to compete in a contest for the rights to design and operate the line. They won, and by 1835, they weren’t carrying just materials—a half a million passengers were recorded. Demand for railroads, for passengers and for industrial goods exploded. You could put in a 20-mile railroad for the equivalent of $650,000 and collect that much in fees every year, because it was cheaper than horses, a lot cheaper. Joint-stock companies became the rage, and the stock market was all too happy to step in and provide capital. Then more capital. And then too much capital. By the 1840s, a railroad mania was raging, stocks selling on multiples of passenger miles, a precursor for multiples of page views that Yahoo stock would trade on 150 years later. An inven- B&W IPO 93 tor named Charles Babbage complained that “the railroad mania withdrew from other pursuits the most intellectual and skilful draftsmen” and sought to invent a machine that might replace them, and make Yahoo possible.

But factory owners couldn’t raise wages because they were having trouble selling their manufactured goods overseas. Why? Because the French and Germans were paying for these goods with their wheat and corn, and the British taxed them out of affordability. How stupid—this almost killed the British Empire in its infancy. With any foresight, the landowners should have dumped their unprofitable farms and invested the proceeds in highly profitable joint stock companies making pottery, shirts and potbelly stoves. England should have gladly bought French wheat and Dutch flowers and German barley and hops so that consumers in these countries could have turned around with the money they received and bought British manufactured goods. There was no substitute. Once you go silky smooth, you never go back. The Corn Laws foolishly lasted until 1846. So, go ahead, buy that Beemer so that Germans can afford to buy our software.

 

pages: 471 words: 124,585

The Ascent of Money: A Financial History of the World by Niall Ferguson

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Admiral Zheng, Andrei Shleifer, Asian financial crisis, asset allocation, asset-backed security, Atahualpa, bank run, banking crisis, banks create money, Black Swan, Black-Scholes formula, Bonfire of the Vanities, Bretton Woods, BRICs, British Empire, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collateralized debt obligation, colonial exploitation, Corn Laws, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, deglobalization, diversification, diversified portfolio, double entry bookkeeping, Edmond Halley, Edward Glaeser, Edward Lloyd's coffeehouse, financial innovation, financial intermediation, fixed income, floating exchange rates, Fractional reserve banking, Francisco Pizarro, full employment, German hyperinflation, Hernando de Soto, high net worth, hindsight bias, Home mortgage interest deduction, Hyman Minsky, income inequality, interest rate swap, Isaac Newton, iterative process, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour mobility, London Interbank Offered Rate, Long Term Capital Management, market bubble, market fundamentalism, means of production, Mikhail Gorbachev, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, mortgage tax deduction, Naomi Klein, Nick Leeson, Northern Rock, pension reform, price anchoring, price stability, principal–agent problem, probability theory / Blaise Pascal / Pierre de Fermat, profit motive, quantitative hedge fund, RAND corporation, random walk, rent control, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, seigniorage, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spice trade, structural adjustment programs, technology bubble, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, too big to fail, transaction costs, value at risk, Washington Consensus, Yom Kippur War

After the advent of banking and the birth of the bond market, the next step in the story of the ascent of money was therefore the rise of the joint-stock, limited-liability corporation: joint-stock because the company’s capital was jointly owned by multiple investors; limited-liability because the separate existence of the company as a legal ‘person’ protected the investors from losing all their wealth if the venture failed. Their liability was limited to the money they had used to buy a stake in the company. Smaller enterprises might operate just as well as partnerships. But those who aspired to span continents needed the company.1 However, the ability of companies to transform the global economy depended on another, related innovation. In theory, the managers of joint-stock companies are supposed to be disciplined by vigilant shareholders, who attend annual meetings, and seek to exert influence directly or indirectly through non-executive directors. In practice, the primary discipline on companies is exerted by stock markets, where an almost infinite number of small slices of companies (call them stocks, shares or equities, whichever you prefer) are bought and sold every day.

To finance their fight for independence against Spain in the late sixteenth century, as we saw in the previous chapter, the Dutch had improved on the Italian system of public debt (introducing, among other things, lottery loans which allowed people to gamble as they invested their savings in government debt). They had also reformed their currency by creating what was arguably the world’s first central bank, the Amsterdam Exchange Bank (Wisselbank), which solved the problem of debased coinage by creating a reliable form of bank money (see Chapter 1). But perhaps the single greatest Dutch invention of all was the joint-stock company. The story of the company had begun a century before Law’s arrival and had its origins in the efforts of Dutch merchants to wrest control of the lucrative Asian spice trade from Portugal and Spain. Europeans craved spices like cinnamon, cloves, mace, nutmeg and pepper not merely to flavour their food but also to preserve it. For centuries, these commodities had come overland from Asia to Europe along the Spice Road.

The only sop to shareholders was that in 1610 the Seventeen Lords agreed to make a dividend payment the following year, though at this stage the Company was so strapped for cash that the dividend had to be paid in spices. In 1612 it was announced that the VOC would not be liquidated, as originally planned. This meant that any shareholders who wanted their cash back had no alternative but to sell their shares to another investor.19 The joint-stock company and the stock market were thus born within just a few years of each other. No sooner had the first publicly owned corporation come into existence with the first-ever initial public offering of shares, than a secondary market sprang up to allow these shares to be bought and sold. It proved to be a remarkably liquid market. Turnover in VOC shares was high: by 1607 fully one third of the Company’s stock had been transferred from the original owners.20 Moreover, because the Company’s books were opened rather infrequently - purchases were formally registered monthly or quarterly - a lively forward market in VOC shares soon developed, which allowed sales for future delivery.

 

pages: 481 words: 120,693

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

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Albert Einstein, algorithmic trading, banking crisis, barriers to entry, Basel III, battle of ideas, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Branko Milanovic, Bretton Woods, BRICs, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, conceptual framework, corporate governance, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial innovation, Flash crash, Frank Gehry, Gini coefficient, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, short selling, Silicon Valley, Silicon Valley startup, Simon Kuznets, Solar eclipse in 1919, sovereign wealth fund, stem cell, Steve Jobs, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy

In The Wealth of Nations, Adam Smith compared the executives of a joint-stock company to “the stewards of a rich man” and warned that “being the managers rather of other people’s money than their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own. . . . Negligence and profusion, therefore, must always prevail.” Writing just over a hundred years later, Alfred Marshall bemoaned the feebleness of the staid British joint-stock company, compared to an America dominated by owner-entrepreneurs: “The area of America is so large and its condition so changeful, that the slow and steady-going management of a great joint-stock company on the English plan is at a disadvantage in competition with the vigorous and original scheming, the rapid and resolute force of a small group of wealthy capitalists, who are willing and able to apply their own resources in great undertakings.”

He emerged from his Omaha fastness to join the battle between capital and talent on Wall Street in the 1990s, when he briefly chaired struggling investment bank Salomon Brothers—a period he described in the next year’s letter to shareholders as “far from fun”—and slashed the bonus pool by $110 million. But here is the catch in management’s fight to rein in superstar salaries, and one institutional reason the super-elite continue to rise: in the age of the vast, publicly traded joint-stock company, where ownership is widely dispersed and boards lack the time, expertise, and gumption to weigh in on the specifics of how companies operate, the managers themselves are superstars, too. Entertainers and athletes are the most visible superstars, but they are hugely outnumbered by the army of business managers who in the past four decades have been transformed from salarymen to multimillionaires.

It is setting out for the river Don, for this is as far as our ships can sail on the Black Sea, but many of those on board will disembark and journey on, not stopping until they have crossed the Ganges and the Caucasus to India, then on to farthest China and the Eastern ocean. What is the source of this insatiable thirst for wealth that seizes men’s minds?” Venice owed its might and money to the super-elites of that age, and to an economic and political system that nurtured them. At the heart of the Venetian economy was the commenda, a basic form of joint-stock company that lasted for a single trading mission. The brilliance of the commenda was that it opened the economy to new entrants. It was a partnership between a “sedentary” investor, who financed the trip, and a traveler, who did the hard and risky work of making the journey. If the sedentary partner paid for the entire mission, he received 75 percent of the profits; if he financed two-thirds of the voyage, he got half.

 

pages: 632 words: 159,454

War and Gold: A Five-Hundred-Year History of Empires, Adventures, and Debt by Kwasi Kwarteng

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accounting loophole / creative accounting, anti-communist, Asian financial crisis, asset-backed security, Atahualpa, balance sheet recession, bank run, banking crisis, Big bang: deregulation of the City of London, Bretton Woods, British Empire, California gold rush, capital controls, Carmen Reinhart, central bank independence, centre right, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, currency manipulation / currency intervention, Deng Xiaoping, discovery of the americas, Etonian, eurozone crisis, fiat currency, financial innovation, floating exchange rates, Francisco Pizarro, full employment, German hyperinflation, hiring and firing, income inequality, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, market bubble, money: store of value / unit of account / medium of exchange, moral hazard, new economy, oil shock, Plutocrats, plutocrats, Ponzi scheme, price mechanism, quantitative easing, rolodex, Ronald Reagan, South Sea Bubble, the market place, The Wealth of Nations by Adam Smith, too big to fail, War on Poverty, Yom Kippur War

This means that the shares had been trading above that level for some months. At this point, the directors of the Company started selling shares to buy them back at a lower price. By the end of September the share price was below £200. This represented a fall of around 75 per cent in four weeks.32 This is a very bald account of the speculation which haunted London for decades, and which seriously damaged the reputation of the joint-stock company. There were, of course, human stories of tragedy and triumph during those fevered summer months of 1720. Thomas Guy, the philanthropist who founded Guy’s Hospital on his gains, started selling his shares on 22 April, and was out of the stock in six weeks. He had converted a £54,000 holding into £234,428. The already phenomenally rich Duke of Marlborough, the greatest general of the age, had, on the urging of his canny wife Sarah, sold his £27,000 holding for £100,000.33 The Duchess of Portland shrewdly instructed her broker to buy as much as he could with the money she gave him and to ‘sell it out again next week’.34 Many were ruined, however.

That spring, defeats followed in quick succession, and a full civil war broke out in the summer of that year. The fiscal resources of the French state were now at a low ebb. This was the prelude to the intense period of bloodshed and repression known as the Terror. Contrary to what one might expect, the Terror stopped the incipient runaway inflation, which the chaos of the summer months had set in train. The government imposed severe legal restrictions, closing the stock market, abolishing joint-stock companies and imposing very harsh measures on those who refused to take the assignat at par. The Jacobins, which was the name given to the French revolutionary extremists, resorted to authoritarian methods, perhaps the most efficient way of preserving the value of a paper currency. Grain prices, consumer prices and wages were all controlled by the so-called laws of the Maximum. These controls were a massive bureaucratic undertaking, but were rigorously enforced.

As Goschen, the Chancellor of the Exchequer, observed in a speech in Leeds Town Hall in January 1891, ‘the stock of bullion at the centre of this country is 24 millions, compared with 95 millions of gold and silver in the Bank of France’, while there were ‘142 millions in the United States’.17 On Friday 14 November, the day on which the fund was arranged, Lidderdale saw the Prime Minister, Lord Salisbury, to inform him of the solution and of the reserve fund which he had organized for Barings. The conclusion of the drama was that Barings ceased to be a partnership and was reconstituted as a joint-stock company, in which there would be limited liability. The whole transaction was conducted with admirable swiftness, and banks outside London were ‘hardly sensible of the crisis’. Remarkably, there were no failures among the county banks, either in the towns or in the countryside.18 On Monday 17 November, the City was beginning ‘to breathe again a little more freely’.19 Lidderdale, despite being widely praised, was asked to be Governor for only an extra year, but it meant a third year in office which was almost unprecedented in the history of the Bank of England up to that point.

 

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Life Inc.: How the World Became a Corporation and How to Take It Back by Douglas Rushkoff

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affirmative action, Amazon Mechanical Turk, banks create money, big-box store, Bretton Woods, car-free, colonial exploitation, Community Supported Agriculture, complexity theory, computer age, corporate governance, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, death of newspapers, don't be evil, Donald Trump, double entry bookkeeping, easy for humans, difficult for computers, financial innovation, Firefox, full employment, global village, Google Earth, greed is good, Howard Rheingold, income per capita, invention of the printing press, invisible hand, Jane Jacobs, John Nash: game theory, joint-stock company, Kevin Kelly, laissez-faire capitalism, loss aversion, market bubble, market design, Marshall McLuhan, Milgram experiment, moral hazard, mutually assured destruction, Naomi Klein, new economy, New Urbanism, Norbert Wiener, peak oil, place-making, placebo effect, Ponzi scheme, price mechanism, price stability, principal–agent problem, private military company, profit maximization, profit motive, race to the bottom, RAND corporation, rent-seeking, RFID, road to serfdom, Ronald Reagan, short selling, Silicon Valley, Simon Kuznets, social software, Steve Jobs, Telecommunications Act of 1996, telemarketer, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trade route, trickle-down economics, union organizing, urban decay, urban planning, urban renewal, Vannevar Bush, Victor Gruen, white flight, working poor, Works Progress Administration, Y2K, young professional

As the operators of these huge projects sought to secure even more capital from a wider range of regions and social classes, they formed a more advanced form of limited partnership called the joint stock company, which could generate investment from shareholders on an open market. This broke business open, allowing for the creation of businesses by virtually anyone capable of getting investors. It almost heralded an era of business meritocracy, which would have generated unprecedented churn in the class structure. The wealthiest merchants were now as vulnerable to upstarts as the aristocracy. Finally, the monarchy had something it could offer the bourgeoisie who threatened to unseat them. A Child Is Born Although monarchs might have lacked the vast financial resources of joint stock companies, they still enjoyed a structural advantage over any of them: central legal authority. Taking a cue from the Church, which had a tradition of “incorporating” groups of monks into single entities, royals exercised their authority to sanction a new kind of chartered body: the corporation.

By granting a specific joint stock company a legal charter to do business, monarchs could give it a monopoly control of its business sector. So a shipping company that once competed with others for the resources of a set of islands now enjoyed exclusive, royally mandated control over that domain. No other corporation could do business in that region, and even locals or colonists would be prohibited by law from competing against the corporation extracting their resources or selling them goods. Another corporation would be granted monopoly control over glass production; another would win beer, and so on. By issuing corporate charters, kings could empower those most loyal to them with permanent control over their colonial regions or industries. The joint stock companies’ problem with competition from rising new businesses or local activity was solved.

 

pages: 288 words: 16,556

Finance and the Good Society by Robert J. Shiller

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bank run, banking crisis, barriers to entry, Bernie Madoff, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, cognitive dissonance, collateralized debt obligation, collective bargaining, computer age, corporate governance, Daniel Kahneman / Amos Tversky, Deng Xiaoping, diversification, diversified portfolio, Donald Trump, Edward Glaeser, eurozone crisis, experimental economics, financial innovation, full employment, fundamental attribution error, George Akerlof, income inequality, invisible hand, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, land reform, loss aversion, Louis Bachelier, Mahatma Gandhi, Mark Zuckerberg, market bubble, market design, means of production, microcredit, moral hazard, mortgage debt, Occupy movement, passive investing, Ponzi scheme, prediction markets, profit maximization, quantitative easing, random walk, regulatory arbitrage, Richard Thaler, road to serfdom, Robert Shiller, Robert Shiller, Ronald Reagan, self-driving car, shareholder value, Sharpe ratio, short selling, Simon Kuznets, Skype, Steven Pinker, telemarketer, The Market for Lemons, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, Vanguard fund, young professional, Zipcar

The invention of the newspaper came soon after, and it was not long before the prices of the East India Company’s shares were reported regularly, spurring immense public interest in the investment. The issuance of shares in joint stock companies (companies owned jointly by a number of people through shares) was limited at rst. To mount an IPO, each corporation needed its own special charter, which was hard to get. The Bank of England was chartered as a joint-stock company in 1694, but at the same time it was given a monopoly on joint stock banking. No other bank could have more than six partners, making it virtually impossible to compete with the Bank of England. A quarter century later, in 1720, Parliament further restricted joint stock companies by mandating—in what later became known as the Bubble Act—that no joint stock company could ever be started without a royal charter. Perhaps this was an e ort to support the rise in the price of shares in the South Sea Company, which was at the time soaring in an obvious bubble.

 

pages: 582 words: 136,780

Krakatoa: The Day the World Exploded by Simon Winchester

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Alfred Russel Wallace, British Empire, cable laying ship, global village, Isaac Newton, joint-stock company, Marshall McLuhan, Maui Hawaii, South China Sea, spice trade, trade route

The Hudson's Bay Company, set up half a century later solely to trade, remains today: the Bay, its flagship department stores, can be found in all of Canada's cities (and in not a few more isolated Arctic settlements), and its owner, a cheerfully eccentric peer called Ken Thomson, lives modestly and happily in a suburb of Toronto. But there was a difference about the VOC. Right from its beginnings, it was cleverly constructed as a joint-stock company. The good burghers of Holland who had initially sent out their own small fleets decided to band together to back a much larger, much more ambitious company, with each backer owning a ‘share’ of this company's value, with the value of each share depending on the amount by which each shareholder backed it. This new concept, of a joint-stock company, with in this case a start-up capital of six and a half million guilders, was to become the model for all the thousands upon thousands of publicly traded firms that are listed on the world's bourses and stock exchanges today, and whose raison d'être, the sharing of risk and sharing of reward, lies now at the beating heart of the modern capitalist system.

.: Tectonic Evolution of Southeast Asia 52 Halmahera 61 Hambantota, Ceylon 279 Hamburg, Mr (ship passenger) 174 Hammersley Range, western Australia 264 Handl, Johann 360–61 Handl's Bay, Krakatoa Island 356 Hapsburgs 29n Harmonie club, Batavia 147, 153, 172, 202–3 Hastings-on-Hudson, New York 274 Hatfield, Oscar 152, 234 Haughton, Mr (in Ceylon) 287 Hawaii Island (Big Island) 102, 103, 104 Hawaiian Islands 102–5, 121, 306, 354n Heims, Father 159–60 Helen (a square-rigger) 59 Her Majesty K II submarine 89 Her Majesty K XIII submarine 89 Hermak, Baluchistan 190 Hess, Professor Harry 90, 91, 92, 97–100 ‘ History of Ocean Basins’ 98n Hesse, Elias 49–50, 135 Hevea brasiliensis (Brazilian rubber) 224, 225 Hibernia (converted cargo ship) 189 High Court, London 263n Himalayan Mountains 74, 112 Hinduism 128, 332 Holland 29n, 44 see also Dutch; Netherlands Hollandsche Thuyn (long-rangepacket) 48 Hollmann, Captain 158–9 Hollwood 113, 393, 394 Holtan community 132 Holtum, John (‘Cannonball King’) 205–6 Holy War (perang sabil) 336, 337, 340, 342 Homo erectus 116 Hondius, Henricus 25 Hong Kong 220, 278 Honolulu 289 Hooghly River 276 Hooker, Sir Joseph 62, 63 Hoorn, Zuider Zee 20, 33 Hope (a barque) 175 Hopkins, Gerard Manley 288 Hôtel des Indes, Batavia 206, 207, 208–9 hotspots 103, 104, 347n House of Orange 151 Houtman, Cornelis de 15–18 Houtman, Frederik de 15 Huaynaputina volcano, Peru 308 Hudson, USA 283 Hudson River School 283 Hudson's Bay Company 30 human sacrifice 303 humongous explosion 309, 312 Hurgronje, Snouck 41, 333–4 Hutton, James 69 Huxley, Sir Thomas 63 hydrochloric acid 243 ice cores 129, 131, 133, 296, 308n Iceland 82, 96, 306 Illustrated London News 155n Imperial Beacons & Coastal Lighting Service 170 India 11, 13, 22, 24, 40, 44, 55, 74, 112, 144, 191, 197, 276, 280, 325, 326, 331, 332 India Rubber, Gutta Percha & Telegraph Works Company 187–8, 197 Indian Mutiny 326n Indian Ocean 2, 21, 53, 114, 161n, 182, 182, 231, 261, 264, 278, 280, 285 indigo 330 Indo-Australian Plate 111, 115, 116 Indonesia (formerly Dutch East Indies) xiv, 63, 68, 116, 137, 145–6, 308, 309, 325, 331 independence 38, 342 International Date Line 112, 219n International Meridian Conference (Washington, DC, 1884) 219n Io 302 Iran 112, 331 Ireland 188, 196, 264 Irian 55, 61 iron oxide compounds 84, 85 Isla de Pascua 308 Islam Sumatra and Java Islamicized 17 rigid formalisms 32 local form of 40–41, 332–3 orthodox 40, 41 birth of 133 and the 1883 eruption 321 becomes entwined with local political developments 325 power of 325 upsurge in Islamic zealotry in the East Indies 325 stand against colonialism 327 number of Muslims in Indonesia 331 an imperial religion 331 collision with the West 331 first comes to the East Indies 331–2 the haj 332, 333 threatened by Western imperialism 334 fundamentalism 339 Isonandra gutta 187 Istanbul 378 Italy 22, 242 I wo Jima 384n ‘s Jacob, Governor-General Frederik 148–9, 149, 150–53, 169, 172, 201, 215 ‘s Jacob, Leonie 151 Jakarta History Museum, Java 46n Jakarta (previously Jayakarta and Batavia) 2, 21, 38, 126, 137, 373, 379 Jakarta Radio 9 James I, King 12 Jammersley Range, New Guinea 264 Japan 34n, 42, 44, 196, 244, 308, 309 Java 1, 2, 6, 7, 66, 78, 242 coffee 10, 141 spice-trading 10, 11, 31 first treaty with the Dutch 16 colonization 16 Islamicized 17, 40 mapping 22, 24 British colonial intentions 34 described 40–41 and slavery 44 volcanic 83 and the Java Trench 89 volcanically unstable 114–15 splits from Sumatra 126, 155 anti-Chinese riots 91998) 138 earthquakes 154 response to impending eruption (1883) 164 and gutta-percha 188 explosion sounds not heard by all 266 number of active volcanoes 309, 326 attacks by white-robed figure 323–4, 325, 337 First Military Region 324 Islam 325, 342 mysticism 327 Java Bode 162, 255 Java Head 155, 161n, 182, 220, 231, 379n Java Major 25, 25, 26 Java Man 116 Java Minor 22 Java Pars. 27 Java Sea 45, 172 Java Trench 89, 111, 114 Javasche Courant 153 Jayabaya 128 Jayakarta (later Batavia, then Jakarta) 34, 38 Jeffreys, Sir Harold 76, 304 jetstream 290 Jogjakarta, Java 2, 153 joint-stock companies 30 jökulhlaups 244 Judd, John 315–16 Volcanoes 315 Julius II, Pope 13n Jupiter 302 Jurassic period 96 Kaimeni 347 Kamchatka Peninsula 309 Kamula volcano, Java (Gede) 126 kangaroos 65, 65, 116, 137n ‘Kapi, Mount’ (in Ranggawarsita's history) 125, 126, 129 Karachi 190, 280 Karim, Haji Abdul 334–5, 337, 338, 339, 341 Kartodirdjo, Sartono: The Peasants' Revolt of Bantenin 1888 322 Katmai, Mount, Alaska 5 Kauai Island 102–3, 104 Kaula 102 Kavachi 384n Kedirie (ship) 299, 313 Keith, Brian 394 Kennedy, Henry George 235, 272 Kerala 44 Kerm-an, Teheran 190 Kertsch, Crimea 190 Ketimbang, Sumatra 156, 164–5, 167, 226–30, 233, 245, 251, 259 Kew weather observatory, Surrey 270 Keys, David: Catastrophe 132, 133, 134,395–6 Kilauea: Halemaumau Crater, Hawaii 1093 Kinematics, Inc. 376, 378, 386 King of the Netherlands, The (steam-yacht) 323 Kiribati, Republic of 100 kites 72 Kittery Island 102 Knossos, Crete 244 Koeripan River 256, 257, 258 Kokkulai, Ceylon 287 Kosrae Island, Pacific Micronesia 298 Kowalski, Bernard 394 Krakatoa archipelago 379 Krakatoa Committee, Royal Society 272–3, 275, 276, 286–7 Krakatoa, East of Java (film) 2, 394–5 Krakatoa Iron & Steel Works 340n Krakatoa Island present remains of 1–2 van Linschoten describes 25–6 first mentioned by its current name 27 derivation of the name 27–8 cultivation 120–21 lush coastal jungle 122, 354–5 Schuurmann describes 173 Ferzenaar visits (August 1883) 176–8 disappearance of 178, 237, 239, 240, 260, 300, 337, 338 surrounded by small faults and zones of weakness 320 purity after the 1883 eruption 355–6 repopulation of 356–66, 372 Krakatoa Islands xv Krakatoa Problem 364, 366 Krakatoa Time 219, 248, 275 Krakatoa Volcanic Observatory 375, 376, 389 Krakatoa volcano (general refernces) see also Danan cone; Perboewatan cone; Rakata cone and the Wallace Line 57, 64 notoriety 68, 116, 286, 393 number of eruptions 117–18 ruins compared with Anak Krakatoa 353, 354 Krakatoa volcano ( possible eruption of AD 416) 123–9, 133 Krakatoa volcano (the confusions of AD 416 or AD 535) 129–31 Krakatoa volcano (the likely eruption of AD 535) 123, 131–4 Krakatoa volcano (the near-certain eruption of 1680) 123, 134–9 Batavians and seamen unaware of potential danger 45–6 first recorded eruption 46, 47 Vogel's report 48–9 Hesse's report 49–50 Schley's painting 138–9, 140 Krakatoa volcano (before the certain eruption of 1883) 139–49 Krakatoa volcano (eruption of 27 August 1883) 4–5, 28, 123, 134, 209 the event 210–39, 240 the effects 241–61 the experiences 261–321 death statistics 5, 313 telegraphy 5, 7, 28n, 146, 167,184–7, 192–4, 215 undersea cables 5, 6, 184, 187, 189 lack of geological knowledge at the time 5–6 religious fears 6 and birth of global village 6–7 impact on climate 7 a Plinian eruption 12 and subduction zones 111 Banten flood destruction 127 warnings of forthcoming eruption 154–63 Perboewatan erupts 167–9, 175, 176, 180, 184–5, 193–4 excursions to visit 172–4 Danan erupts 176, 177 statistics of deaths and injuries 242 the sound of 262–8 progress of the shock waves 273–5, 313 art and 282–5 and temperature 293–6 floating bodies 296–300 existed above a large chamber of magma 318–19 burial of the dead 321, 322 rebuilding after 321, 323 political and religious consequence 321, 342–3 reluctance to settle near the volcano 379 Kramat 260 Kultuurstelsel (Cultivation System) 328–9, 333 Kurile Islands 309 Kurrachee 276 Kyoto 297 Labuan, Java 337 lahars (volcanic mud and water slurry) 243 Lakagígar (Hekla), Iceland 294 Lamongan 155 Lampong Bay 166, 216, 219, 228, 234, 247, 249, 250, 251 Lancaster, James 34 Lang Island, Krakatoa (previously Panjang, now Rakata Kecil) xv, 118n, 158n, 314, 318, 354 Laos 34n Lascar volcano, Chile 308 Laurasia 73, 74, 75 lava flows 369 Laysan Island 102 Le Havre 282 Leicestershire 57, 58 Lemuria 53n Liciala spinosa 355 Lincoln, President Abraham 196, 219n Lindeman, Captain T.H. 173, 174, 216, 219, 230 Linnean Society, Burlington House, Piccadilly, London 52–3, 54, 62, 64, 65 Linschoten, Jan Huyghen van 23–6, 26 Itinerario 24, 25 Lippincott Gazetteer 190n Lisbon 14, 15, 191 Lisianski Island 102 lithosphere 109–10, 302 Llaima volcano 308 Lloyd's of London 161, 168, 180–83, 186, 193, 232, 261 Committee 182, 197 Foreign Intelligence Office 193 Lochart, Nanette 208, 209 Locomotive 151 Lodewijcksz, Willem 25, 26 Logan, Captain William 223–4 Lombok Island 61, 66, 69 Lomu, Jonah 384n London 19, 179–80, 189, 190, 191, 196, 197, 270, 284 London Station 193 Londonderry 196 long waves 278, 279–80 Los Angeles 200 Luzon 24 Lyell, Sir Charles 62, 63, 69 Macassar, Celebes, Macasserese 31, 44, 265, 326 Macau 19 McColl, Mr (Lloyd's agent) 181, 259–60 mace (aril) 11, 18 MacKenzie, Captain 157, 161 McLuhan, Marshall 184, 198 Madagascar 16, 53 Madras 190, 191, 280 Madura 17 Magellan, Ferdinand 23 Magellan Strait 19 magma 84, 103, 104, 305, 315, 316,318–20 magnetic airborne detector (MAD) 93n magnetism and basalts 84, 85 moon's surface 100 remanent 91–2, 96, 97, 102 underwater 93–5 magnetite 84–5, 85, 92n magnetometers 93–6, 97, 101, 107 Magpie, HMS 265, 272 Mahdi 322, 335, 336, 337, 342 Malabar Coast 11 Malacca 11, 18, 22, 29, 34, 44 Malaku 61 see also Moluccas Malay Archipelago 59, 60, 190 Australian (eastern) end of 55, 64, 65 Indian (western) end of 55, 64, 65 Wallace's preferred term 59 Malay language 59 Malaya peninsula 22, 24, 29, 31, 40, 53, 190, 326, 331 Maldives 23 Malta 191 Manchester Literary and Philosophical Society 294 Manchus 157n Manhattan, New York City 295 Manila 196, 264 Manley, Reverend W.R. 288 maps 21–7, 26, 155 Mardijkers 44 Marie (Danish salt-carrying barque) 219–20, 230, 234, 246 Mars 302 Mason, Ron 93–5 Massachusetts Bay Company 30 Mataram sultan of 40 Matuyama, Motonari 96 Maui Island 103 Mauk 260 Maurice of Nassau, Prince 16n Mauritius 16n, 34n, 261, 263n, 270 Maan civilization 133 Mayon, Mount 266 Mecca 332–5, 336, 337, 342 Mecca's Plain of Arafat 333n Medea (British ship) 216, 231 Mediterranean 14, 23, 191 Mediterranean region 133 Mekong 24 Melbourne 270 Merak, Java 160, 222, 225, 238, 246, 249n, 250, 252–3, 259, 260, 337 Merapi, Mount 48, 155 Merbapu, Mount 48, 155 Mercator, Gerardus 71 Merchant Adventurers 30 Merchant Staplers 30 Meteorological Council 270 meteorology 70, 76, 275, 290.

Silver & Company 187 swiftlets 21 Sydney 189, 264n Sydney Morning Herald 232 Symons, G.J. 272–3 Tabr-iz, Persia 190 Tachard, Guy 27–8 Tambora, Mount, Sumbawa 5, 48, 244, 283n, 294–5, 296, 308n, 312, 393 Tambora language 295 Tamils 44 Tangier 325 tapirs 68 tarekat (Abdel Karim's brotherhood) 337 Tasmania 289 Taupo, Mount, New Zealand 5, 312 Taylor, Frank 72n tea 141, 238–9, 330 Teheran 190 telegraph cable, submarine 5, 6, 146, 184, 187–92, 188 telegraph, electric 5, 7, 28n, 146, 167, 175, 179, 184, 186–7, 189–90, 192, 195, 215, 238, 246, 260 telegraph system 271 Telok Betong, Sumatra 166, 216, 219, 228, 234, 247, 249n, 250, 251, 253–9, 277 temperature 293–6 Tenison-Woods, Julian 232, 233n, 234n Tennyson, Alfred, Lord St Telemachus 286 ‘ The Deep-Sea Cables’ 191 tephra 242, 244 Tern Island 102 Ternate 56, 60, 61 Tertiary period 84, 87 Tethyan Ocean 73, 74 Texel 15, 19, 23 Thailand 21, 34n Thames River 284, 290 Theodore the Studite, St 10 Theosophy 53n thermometers, recording 267 Thiara carolitaciturni (a mollusc) 367n Thomas Cook guides 143 Thomson, Captain 216, 231 Thomson, Ken 30 Thor, Mr (in Batavia) 205 thorium isotopes 109 Thornton, Ian 369 Krakatau: The Destruction and Reassembly of an Island Ecosystem 396 thrushes 55, 65, 66, 116, 137n Thunderer, The 194 Thwart-the-Way Island 161n, 237, 260n, 278 Tidal Survey of India 276 tidal wave 242n, 313, 319 tide-gauges 276, 277, 278, 280, 282 tide-meter 252, 253–4, 277–8 Tiflis, Georgia 190 time zones 219, 248, 263 Times, The 179–80, 185, 185n, 186n, 187, 193–4, 197, 272, 291, 299 Timor 13n, 19, 23, 29, 55, 168 tin 148 Tjeringin, Java 238, 253, 260 Toba, Mount, Sumatra 5, 309, 312 tobacco 330 Tokyo 196, 200 Tonga 112, 384n Tordesillas Line 13n, 14 Toronto 103, 274 transcurrent fault 106, 107 transform fault 105, 106, 106 tree-ring samples 129, 131, 133, 296 trees 137, 148, 166, 298 repopulation of Krakatoa Island 359–60 Trenton, New Jersey 263 Treub, Melchior 364, 365 trilobites 73 Trincomalee, Ceylon 264 Trobriand Islands 55 troposphere 285 Troy, New York 319 Tsingtao, Shandong peninsula 157–8n tsunamis 113, 231, 242n, 244, 246, 249, 257, 275–8 Tunisia 295 Turkey 112, 290 Turkey Company 30 Turner, J.M.W. 283n Tuzo Wilson, J. 101–7, 106, 109, 306 ‘A New Class of Faults and Their Bearing on Continental Drift’ 105 Typhon 303 Tyringin, Java 246, 250, 259 Ujung Kulon National Park 379n United States Coast Guard 93 United States Geological Survey 207, 375 United States Government 93 United States Navy 93, 107, 107 United States of America 197 evidence of crustal movement 91, 93 makes peace with Britain 139n and Diego Garcia 263n high number of volcanoes 308 Universit of Auckland 290 University of Graz, Austria 76 University of Hawaii 290 University of Melbourne 290 University of Rhode Island 133, 290, 397 Universit of Toronto 101 Unzen, Mount 244, 266, 378 uranium isotopes 109 Usk, south Wales 57 Utrecht 37 Vail, Alfred 146 van den Broecke, Mr (storekeeper) 35 van der Stok, Dr J.P. 162–4, 216 van der Stok, Mrs 162 Varanus salvator (five-banded swimming monitor lizard) 389–91, 390 Vava'u Group 384n Venice 13, 34 Vening Meinesz, Felix 88–90 Verbeek, Dr Rogier Diederik Marius 170, 250n employment 169–70, 171 misses first part of eruption 171 sees Krakatoa in July 1883 176 and van der Stok 216 on renewed activity of Krakatoa 347, 348 the first on to Krakatoa Island after 1883 eruption 356 Krakatau 169, 266–7, 313–14, 315, 347, 367, 397 Vereenigde Oost-Indische Compagnie (VOC) 48, 50, 119, 138, 144 chartered by the Dutch government 30, 31 rights 30 and capitalism 30 joint-stock company 30 ‘Gentlemen Seventeen’ 31, 33 rules most of East Indies for two centuries 31 Coen and 35 corporate logo 38, 38 formative years 38–9 and Batavia 42, 47, 135, 139 hat rule 44n courts 45 harsh treatment by security officers 47 employee care 48 buildings reportedly damaged by earthquake (1681) 50 and naval blockades 139 collapse in 1799 31, 141, 143 Vereker, Captain Hon.

 

pages: 357 words: 110,017

Money: The Unauthorized Biography by Felix Martin

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bank run, banking crisis, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, British Empire, call centre, capital asset pricing model, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, credit crunch, David Graeber, en.wikipedia.org, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, Fractional reserve banking, full employment, Goldman Sachs: Vampire Squid, Hyman Minsky, inflation targeting, invention of writing, invisible hand, Irish bank strikes, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, mobile money, moral hazard, mortgage debt, new economy, Northern Rock, Occupy movement, Plutocrats, plutocrats, private military company, Republic of Letters, Richard Feynman, Richard Feynman, Robert Shiller, Robert Shiller, Scientific racism, seigniorage, Silicon Valley, smart transportation, South Sea Bubble, supply-chain management, The Wealth of Nations by Adam Smith, too big to fail

Not content with furnishing France with an all-new system of paper money, Law also began to attack the second part of France’s economic problem—its parasitic system of public finances and the unsustainable level of the public debt. The tried and tested solution was to take a scythe to the sovereign’s creditors’ claims by devaluing the monetary unit or announcing an outright default. But Law’s plan was to play not on creditors’ fears, but on their greed. In 1717, with his prestige buoyed by the success of his Bank, he had convinced the Regent to allow him to form a joint-stock company, the Company of the West, and to award it the rights to develop French North America, which had until then been held by the arch-bloodsucker Antoine Crozat. These vast and virgin territories were sure, Law publicly predicted, to yield gigantic profits for the new company—and all of it with the endorsement of the French crown. Holders of sovereign bonds were invited to swap their debt claims on the crown for equity shares in the Company of the West.

Each acquisition was funded in the same way. Investors turned in their sovereign bonds and bills at Law’s office in the Rue Quincampoix in return for equity shares in the ever-expanding Company. By the middle of 1719—now officially renamed the Company of the Indies, but known popularly after its most glamorous asset as the Mississippi Company—Law’s giant corporation had subsumed every major joint-stock company in France. In August 1719, Law put the final phase of his plan into action. The Company acquired the rights to collect all the indirect taxes in France. It no longer represented only the crown’s foreign interests; its revenues now derived from the French economy as a whole. At the same time, it announced its intention to buy up the entire remaining part of the sovereign debt. To finance these mammoth transactions, it issued huge new tranches of equity.

And in the subsequent century and a half, the Bank itself had struck the same marriage time and time again with an ever-widening harem of other private bankers. Just as the sovereign had lent its unique authority to the Bank, so the Bank had over time got into the practice of lending its authority to the universe of other banks; and, until the policy reversal of 1858 that had heralded the beginning of the end for Overends, to the bill brokers as well. The result was a modern monetary economy in which “[o]n the wisdom of the directors of one Joint Stock Company, it depends whether England is solvent or insolvent … [a]ll banks depend on the Bank of England, and all merchants depend on some banker.”46 Here was the reason, Bagehot explained, that Lombard Street was the money market of the entire global economy: the place where more banks were able to issue more money than ever before in the history of the world. Just as the Bank’s money had originally gained its currency from its settlement with the sovereign, so now the moneys issued by the banks and bill brokers of Lombard Street gained theirs from the Bank, and the moneys of the country banks gained their currency from the banks and brokers of Lombard Street.

 

pages: 62 words: 13,939

Self-Reliance and Other Essays by Ralph Waldo Emerson

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Johann Wolfgang von Goethe, joint-stock company, Mark Zuckerberg, Ralph Waldo Emerson

So we live the life of others, a program created by others, because of the fear of being wrong and outcast. My mission in life is to listen to my own voice as much as possible and follow my instincts. Whenever I do this, I always feel good about myself eventually and I get the glimpse of the freedom of being outside the Matrix. It’s a hard thing to do, but it’s worth it every time. I never lose when I trust myself. Ji Lee ● ● ● Society is a joint-stock company, in which the members agree, for the better securing of his bread to each shareholder, to surrender the liberty and culture of the eater. The virtue in most request is conformity. Self-reliance is its aversion. It loves not realities and creators, but names and customs. Whoso would be a man must be a nonconformist. He who would gather immortal palms must not be hindered by the name of goodness, but must explore if it be goodness.

 

pages: 236 words: 77,735

Rigged Money: Beating Wall Street at Its Own Game by Lee Munson

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affirmative action, asset allocation, backtesting, barriers to entry, Bernie Madoff, Bretton Woods, buy low sell high, California gold rush, call centre, Credit Default Swap, diversification, diversified portfolio, estate planning, fiat currency, financial innovation, fixed income, Flash crash, follow your passion, German hyperinflation, High speed trading, housing crisis, index fund, joint-stock company, moral hazard, passive investing, Ponzi scheme, price discovery process, random walk, risk tolerance, risk-adjusted returns, risk/return, too big to fail, trade route, Vanguard fund, walking around money

Forget blaming the French for socialism or Wall Street fat cats for financial meltdowns. It was the Dutch that got us into this mess more than 400 years ago. While trade and commerce is an ancient practice, the first stock didn’t spontaneously generate until 1602, when the Dutch East India Company was founded. Why was this important, outside of being the first stock? First of all, this was the first joint-stock company, meaning regular people like middle class merchants were able to invest in a public company. On September 1 the public subscription period was over. Five hundred thirty-eight subscribers, including craftsmen and small entrepreneurs, were given shares that were freely transferable.1 Before this there was a barrier to entry for investments. The idea of selling a piece of a company in order to lower the risk to any one person was not new, but allowing anybody with the money to buy shares was ground breaking.

See Home Mortgage Disclosure Act hold holding period home equity line of credit (HELOC) Home Mortgage Disclosure Act (HMDA) hyperinflation I idea flow income investor index index fund Indications of Interest (IOI) Individual Retirement Account (IRA) inflation information sheets The Intelligent Investor interest rates investment banking, stock sales and investment plan, tax-deferred investment scenarios investment, sustainability of investor returns investors, types of IOI. See Indications of Interest IRA. See Individual Retirement Account J joint-stock company junk bonds K Kinder, Gary L Lefèvre, Edwin Lehman Black Book liquidity liquidity providers Lo, Andrew London Gold Pool low-latency trading lower-risk environment M Malkiel, Burton market efficiency market maker market orders Market Participant Identifier (MPID) Market Wizards markets, sideways Markowitz, Harry master limited partnerships (MLPs) Master Settlement Agreement (MSA) May Day 1975 McClellan, Tom Meisler, Helene MLP.

 

pages: 51 words: 14,616

The Communist Manifesto by Karl Marx; Friedrich Engels

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Anton Chekhov, Johann Wolfgang von Goethe, joint-stock company, means of production, Ralph Waldo Emerson, The Wealth of Nations by Adam Smith, Upton Sinclair

*This applies chiefly to Germany where the landed aristocracy and squirearchy have large portions of their estates cultivated for their own account by stewards, and are, moreover, extensive beetroot-sugar manufacturers and distillers of potato spirits. The wealthier British aristocracy are, as yet, rather above that: but they, too, know how to make up for declining rents by lending their names to floaters of more or less shady joint-stock companies. Return to text. * Phalanstères were Socialist colonies on the plan of Charles Fourier; Icaria was the name given by Cabet to his Utopia and, later on, to his American Communist colony. Return to text. * The party then represented in Parliament by Ledru-Rollin, in literature by Louis Blanc, in the daily press by the Réforme. The name of Social-Democracy signified, with these its inventors, a section of the Democratic or Republican party more or less tinged with Socialism.

 

pages: 481 words: 121,669

The Invisible Web: Uncovering Information Sources Search Engines Can't See by Gary Price, Chris Sherman, Danny Sullivan

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AltaVista, American Society of Civil Engineers: Report Card, bioinformatics, Brewster Kahle, business intelligence, dark matter, Douglas Engelbart, full text search, HyperCard, hypertext link, information retrieval, Internet Archive, joint-stock company, knowledge worker, natural language processing, pre–internet, profit motive, publish or perish, search engine result page, side project, Silicon Valley, speech recognition, stealth mode startup, Ted Nelson, Vannevar Bush, web application

Search Form URL: http://www.tornado-insider.com/radar/ comp AdvSearchForm.asp Federally Incorporated Companies Canada http://strategis.ic.gc.ca This database produced by the Canadian Government allows searching by corporation name, location, status, and more. It also allows results sets to be sorted by corporate name or corporate number. Search Form URL: http://strategis.ic.gc.ca/cgi-bin/sc_mrksv/ corpdir/dataOnline/corpns_se Related Resources: (Nova Scotia) Registry of Joint Stock Companies Database Search http://www.gov.ns.ca/snsmr/rjsc/search.stm Business and Investing 167 Fortune 500 http://www.fortune.com The well-known business list identifies the largest U.S. publicly traded companies. Search Form URL: http://www.fortune.com/fortune/fortune500/ Related Resources: Forbes Private 500 (Largest U.S. Privately Held Companies) http://www.forbes.com/private500/ Forbes International 800 http://www.forbes.com/international800/ Inc. 500 Database (1982-2000) http://www.inc.com/500/search/1,3762,,00.html Herringtown http://www.redherring.com The Red Herring, a respected publication providing coverage of the information technology business, provides this database of startup companies.

See also audio; images; multimedia; video coverage, 53–54 crawlers and, 66 indexing, 35 Invisible Web searches, 143 search engines and, 57–58 NoodleBib (Bibliography Creator), 333 Noodlequest (Search Tool Selection Aid), 333 North American Industry Classification System (NAICS), 182 SIC Correspondence Tables, 330 Northern Light maps, 97 News Search, 287 Special Collection, 47, 104 Northwest Territories Geographic Names Database, 336 NoteCards (Xerox), 10 Notess, Greg, 34 notifiable diseases, 243 Nova Scotia, Registry of Joint Stock Companies Database, 166 NSERC Awards Search Engine Canada, 363 NTIS (National Technical Information Service) Electronic Catalog, 158 Nua Internet Surveys, 204 Nuclear Explosions Database, 354 Nuclear Power Plant Databases, 354 Nunavut Environmental Database (NED), 351 Nursing Home Compare, 252–253 Nutrition Analysis Tool 2.0, 253 nutritional information resources, 253–254 428 The Invisible Web O obituaries, newspaper, 286 Occupational License Search (Alaska), 308 Occupational Safety and Health Administration (OSHA) Accident Investigation Search, 259 SIC search, 181–182, 330 Ocean Information Center, Research Ship Schedules, 364 oceanography information resources, 362–364 Ockerbloom, John Mark, 159 OCLC Participating Institution Search, 332 Oddens, Roelof P., 40 Odden’s Bookmarks, 40 Office of Assistant Secretary of Health (OASH), 257–258 Official Netscape Guide to Internet Research (Calishain), 110 oil, crude, 358 Oil Spills, Historical Incident Reports, 358 Olympic Winners Database, 322 192.Com (U.K.), 187, 297 OneLook, 99 O*Net, 186–187 Online Archive of California (OAC), 158–159 Online Books Page, The, 159 Online Calendar of Henry James’ Letters, 268 Online Distance Education Catalog, 212 Online Public Access Catalogs (OPACs), 98 Online Telephone Book Directory, 188, 297 OnTerm (Canada), 327 opaque Web, 70–72 Open Directory Project (ODP), 22–26, 25 OperaBase, 223 Oran’s Law Dictionary, 276 O’Reilly & Associates, 12 Organization for Nuclear Research (CERN), 9 orphan drugs, 244–245 Oscars, recipients of, 100 Oscars Database, 321 OSHA (Occupational Safety and Health Administration), 182 Oxford Companion to Wine, 328 P Pacific Film Archive, 219 package tracking, 314 PackTrack, 314 page capture utilities, 112 Papers of Thomas A.

., 316 real-time data, 60–61, 66–67, 102–103 real-time information resources, 311–317 Real-Time Streamflow Water Data, USGS, 312 Realtor.Com, 194 recall CPSC, 169 precision and, 94–95 recalls, products, 169, 324 ReCap Biotech Alliance Database, 179 Recent Advances in Manufacturing (RAM), 181 Recent Home Sale Purchase Prices, 194 Recent Marine Data, National Buoy Data Center, 313 recipes, 328 RECON-Regional Economic Conditions, 100, 172 Recording Industry Association of America (RIAA), 223 Records and Information Management System (RIMS), 274 Records Search: National Archives of Australia, 159–160 Recreational Opportunities on Federal Lands, 341 Red Cross Chapter Locator, 334 Red Herring Company and Persons Search, 168 redherring.com, 167, 168 Redlist (Threatened Species Database), 347 REEF Database (Marine Species Data), 362 ReefBase, 357 reference resources, 319–341 REFORGEN (forestry), 348 Refugee Caselaw Site, 282 Regional Economic Data, U.S., 172 Regional Economic Forecasts, 170 Regional Economic Information System, 170 Regional Gasoline Costs, U.S., 323 Registered Aircraft Databases, 383 Registered Identification Number Database, 181 Registry of Joint Stock Companies Database (NS), 166 REIT (Real Estate Investment Trusts) Directory, 194 relevance ranking calculations, 32 definition, 21 Invisible Web content, 142–143 manipulation of, 112 metasearch engines, 46 religion information resources, 378–379 Religious Centers, Directory of, 378–379 Remote Sensing Glossary, 352 reputation, directory resources, 141 resAnet, National Library of Canada, 157–158 Research Index search engine, 74 research resources, 193 Research Ship Schedules, 364 Research Ship Specifications, 364 ResearchBuzz, 110 432 The Invisible Web ResearchIndex, 67, 104, 202 resources collection goals, 153 customized collection of, 111, 113 discovery of, 78–79 Restaurant Health Inspection Reporting System (Denver), 308 Restaurant Inspection Search (Boston), 308 results maximum viewable, 72 speed of, 35 results-output format, 30 Reverse Telephone and Address Lookup, 188 Reverse Telephone Directory, 188, 298 RhymeZone, 327 RIAA Gold and Platinum Database, 223 Rice Bibliography, 348 Right-to-Know Network, 357 River Statistics, U.S., 385 rivers, 385 Roberts, Larry, 2 robots, 26 Robots Exclusion Protocol, 53, 72–73, 73, 89–90 robots.txt, 73 Roll Call U.S.

 

pages: 399 words: 155,913

The Right to Earn a Living: Economic Freedom and the Law by Timothy Sandefur

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barriers to entry, big-box store, Cass Sunstein, clean water, collective bargaining, corporate governance, corporate social responsibility, Edward Glaeser, housing crisis, joint-stock company, Joseph Schumpeter, labour mobility, minimum wage unemployment, positional goods, price stability, profit motive, race to the bottom, Ralph Nader, RAND corporation, rent control, Silicon Valley, The Wealth of Nations by Adam Smith, trade route, transaction costs, Upton Sinclair, urban renewal

All corporations are said to be ecclesiastical or lay: ecclesiastical are either regular, as abbeys, priories, chapters, &c. or secular, as bishoprics, deanries, archdeaconries, &c. lay, as those of cities, towns, companies, or communities of commerce, &c.43 There is nothing in this definition to indicate what the word would come to signify within a century. Today’s corporations trace their roots to the English “joint-stock companies,” organized in the 17th century to assemble capital and operate large-scale enterprises.44 These joint-stock companies were 26 “Corporations” and “Monopolies,” Part I: 1602–1870 granted royal charters—official permission to engage in a lucrative trade, which were monopolies by definition.45 Any person engaging in projects such as establishing colonies, or transporting and selling tea or other commodities, without this royal approval ran the risk of severe penalties.

Board of Trustees of Village of Barrington, 878 N.E.2d 723, 724 (Ill. App. 1st Dist. 2007). 44. Robert Hessen, In Defense of the Corporation (Stanford, CA: Hoover Institution Press, 1979), pp. 3–33; and Margaret M. Blair, “Locking in Capital: What Corporate Law Achieved for Business Organizers in the Nineteenth Century,” UCLA Law Review 51 (2003): 414–23. 45. “What frequently distinguished incorporated from unincorporated joint-stock companies [in the 18th century], therefore, was that the former were owned by politically well-connected merchants who had paid a handsome price to secure a monopoly, while the latter lacked the money or connections to gain similar privileges.” Paul G. Mahoney, “Contract or Concession? An Essay on the History of Corporate Law,” Georgia Law Review 34 (2000): 887. 46. Jefferson to George Logan, November 12, 1816, in The Works of Thomas Jefferson, ed.

 

pages: 934 words: 135,736

The Divided Nation: A History of Germany, 1918-1990 by Mary Fulbrook

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Albert Einstein, banking crisis, Berlin Wall, centre right, collective bargaining, deindustrialization, Fall of the Berlin Wall, feminist movement, first-past-the-post, full employment, joint-stock company, land reform, means of production, Mikhail Gorbachev, open borders, Peace of Westphalia, Sinatra Doctrine, union organizing, unorthodox policies

The structure of unions was simplified, with one union per industry, and the unified unions belonging to a single umbrella organization, the DGB. A myth soon grew up of 'social partnership' between employers and employees. 'Co-determination' in industry (Mitbestimmung) was in fact only introduced, against considerable employer opposition, in a limited fashion in 1951, so that all joint stock companies in the coal and steel industries with over a thousand employees had to have representation of workers' views at the managerial level. (It was extended, again against considerable employer opposition, in 1976 to cover all joint stock companies with over two thousand employees.) In 1952, the Works Constitution Law provided that there should be works councils for enterprises with more than twenty employees. West Germany had a relatively low strike record. It also uniquely benefited, in the first decade or so after its foundation, from a supply of cheap and mobile labour: the refugees from the German Democratic Republic.

Much of the equipment became rusty or was damaged during its transportation to the Soviet Union; and more complex equipment, once dismantled, could not be successfully reassembled in the USSR. One solution was to ship out German experts along with their machinery, in order to reassemble and operate it in the USSR. Another was to leave equipment in Germany but appropriate the product. In June 1946 twenty-five Soviet joint-stock companies (SAGs) were formed, with 213 firms, producing thirty-two per cent of the total production of the Soviet zone, taken over into Soviet ownership. These were gradually phased back into German state ownership in the period 194954. The Soviets also exacted considerable reparations and occupation costs. Up to 1953, about one quarter of the zone's national product was spent on occupation costs and reparations payments (compared with a figure for the west of perhaps 1115% in the period up to 1949).

 

pages: 556 words: 46,885

The World's First Railway System: Enterprise, Competition, and Regulation on the Railway Network in Victorian Britain by Mark Casson

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banking crisis, barriers to entry, Beeching cuts, British Empire, combinatorial explosion, Corn Laws, corporate social responsibility, David Ricardo: comparative advantage, intermodal, iterative process, joint-stock company, joint-stock limited liability company, knowledge economy, linear programming, Network effects, New Urbanism, performance metric, railway mania, rent-seeking, strikebreaker, the market place, transaction costs

The ever-shifting imperial frontier provided potentially ‘rich pickings’ for soldiers and bounty-hunters. Furthermore, many young men of great ability chose to enter the church in search of spiritual rather than material rewards, with the entrepreneurial risk-takers opting for missionary work overseas. The principle of partnership was extended during the Victorian period through a series of reforms to company law which made it much easier for large businesses to be incorporated as joint stock companies with limited liability for their shareholders. This in turn increased liquidity in stock markets by making it easier for ordinary people to buy and sell shares in small denominations. This in turn facilitated the growth of large firms. However, little trust was placed in the law as a means of resolving business disputes. The law had a bad reputation for being slow, complex, and extremely expensive.

The exhaustion of local coal deposits led to increasing amounts of haematite ore being consigned across the Pennines by rail to the north-east, where it was processed on Teesside and exported to continental Europe. Following the onset of the Great Depression in 1873, Wnancial diYculties arose in the Whitehaven area, and so it was natural for the company to look to larger and better capitalized companies to take it over. The LNWR was a natural candidate, as one of the country’s largest joint stock companies, and the owner of two railways into the Whitehaven area: the Whitehaven Junction (see Section 5.4.5) and the Cockermouth Keswisk and Penrith. The FR, whose main line ran south from Whitehaven to Barrow and Carnforth, had much stronger links with the local business community, however, and consequently better local knowledge. Although the FR had periodic squabbles with the LNWR, relations between the two companies were generally harmonious—for no better reason than that the FR had little option but to ‘toe the line’.

To obtain powers of compulsory purchase, a special Act of Parliament was required, as explained earlier. Land was expensive, and purchasing enough line to build a railway was normally beyond the means of any single person—including an aristocrat. Even a business partnership involving a small number of individuals (a common form of organization in Victorian Britain) would be Wnancially stretched. The solution was to form a joint stock company with the power to issue shares. Furthermore, in order to secure a wide market for these shares, limited liability had to be provided. Ordinary members of the public did not have the conWdence to purchase shares in companies over which they could not exert direct control unless their liability for losses was limited to the price that they had paid for their shares. Until the company law reforms of the mid-Victorian period, however, joint stock businesses with limited liability had to be authorized individually by Parliament.

 

pages: 369 words: 94,588

The Enigma of Capital: And the Crises of Capitalism by David Harvey

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accounting loophole / creative accounting, anti-communist, Asian financial crisis, bank run, banking crisis, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business climate, call centre, capital controls, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, deskilling, equal pay for equal work, European colonialism, failed state, financial innovation, Frank Gehry, full employment, global reserve currency, Google Earth, Guggenheim Bilbao, illegal immigration, indoor plumbing, interest rate swap, invention of the steam engine, Jane Jacobs, joint-stock company, Joseph Schumpeter, Just-in-time delivery, land reform, liquidity trap, Long Term Capital Management, market bubble, means of production, megacity, microcredit, moral hazard, mortgage debt, new economy, New Urbanism, Northern Rock, oil shale / tar sands, peak oil, place-making, Ponzi scheme, precariat, reserve currency, Ronald Reagan, sharing economy, Silicon Valley, special drawing rights, special economic zone, statistical arbitrage, structural adjustment programs, the built environment, the market place, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, Thorstein Veblen, too big to fail, trickle-down economics, urban renewal, urban sprawl, white flight, women in the workforce

This becomes important because, as the eighteenth-century French utopian thinker Saint-Simon long ago argued, it takes the ‘association of capitals’ on a large scale to set in motion the kinds of massive works such as railroads that are required to sustain long-term capitalist development. This was what the nineteenth-century financiers the Péreire brothers, schooled in Saint-Simonian theory, effectively achieved through the new credit institutions they set up to help Baron Haussmann transform the built environment of Second Empire Paris in the 1850s. (The boulevards we see today date from this period.) In the case of limited and joint stock companies and other corporate organisational forms that came into their own in the nineteenth century, enormous quantities of money power are amassed and centralised (often out of myriad small amounts of personal savings) under the control of a few directors and managers. Acquisitions (both friendly and hostile), mergers and leveraged buy-outs have also long been big business. Activity of this kind can entail new rounds of accumulation by dispossession.

King 79, 80 hunger, world 80 I Icarian communes 130 Iceland bankrupt 6, 37 exposure of national banks to toxic assets 141 idealism 133 immigration 59, 131 anti-immigrant fervour 103 colonisation of urban neighbourhoods 247 encouraging 14 Immigration and Nationality Act (1965) 14 imperialism 108, 109, 113, 144, 171, 204, 207, 212 Inca gold 47, 144 India anti-land grab movement 257 British goods 108, 158 British-imperialist-controlled 144 caste distinctions 62 colonial occupation 205 democracy 200 growth 222 labour reserves 64 Maoist movements in rural India 226 and oil market 83 partition 208 plundering of wealth from 109, 113 rural uprisings in 38 Indian Supreme Court 179 individualism 131, 132, 150, 170, 175, 197, 199 Indonesia Asian Currency Crisis 271 excessive urban development 8 industrial development 256 ‘industrial reserve army’ 15, 58, 59 industrial revolution 160 industrialisation 6, 33, 35, 68, 92, 172, 209 infant mortality 137, 152 inflation 15, 108, 114, 222 accelerating 113 ‘grand inflation’ (16th century) 48 and oil prices 80 rapid 111 Weimar 141 ‘informal sector’ 145 infrastructure disasters 86 educational 93 investment in 86, 167, 222 payment for use of 86–7 social 93 inheritance taxes 44 innovation 89, 90 communications 42, 93 labour-saving 94 organisational 97, 101 product 95 technological 67, 96–7, 101, 103 transport 42, 93 waves of 92–3 insider trading 99 insurance companies 4–5 intellectual property rights 34, 40, 221, 245–6 interest rate swaps 262 interest rates and austerity programmes 246, 251 Fed cuts 5, 261 International Monetary Fund (IMF) 5, 28, 34, 36, 51, 69, 200, 223, 246, 247 and asset values 6 bail-outs in Asian Currency Crisis 261 ‘Fifty Years is Enough’ campaign 55 ‘structural adjustment programs’ 19, 261 internet 190 investment capital 93, 203 debt-fuelled 166 devaluation of prior investments 93 infrastructure 86, 167, 222 in production 114 profitable 19 spreading of investment risks 85 subsidies for 36 iPods 131, 150 Iran: US threats 210 Iraq: US interventionism 210 Ireland: property-led crisis (2007–10) 5–6, 261 Isaacs, William 8 Israel dispossession of Palestinian land 247 kibbutzim 130 ivory 73 J Jacobs, Jane 171, 177 Japan boom of 1980s 8 collapse of stock market 8 depression in economy 45 falling exports 6 industrialisation 68, 92 invasion of US auto market 15 negative population growth 146 plunging land prices 8, 9 property-market led bank crisis 261 reconstruction of economy after Second World War 202 rise in the 1960s 35 joint stock companies 49 J.P. Morgan 142, 173, 219 ‘just-in-time’ principle 68 K Kay, Kenneth 53 Kerala, India, and remittances 38 Keynes, John Maynard 32, 53, 55, 87, 111, 160, 226, 237, 238 General Theory 114 Keynesian, Keynesians 168, 238, 255, 261 Kohl, Helmut 64 ‘Kondratieff cycles’ 96 Krieger, Andy 24–5 Krugman, Paul 235–6 kulaks 250 L labour and capital 56, 88, 169–70 casual 242 competition 61 costs 15, 16, 88 disempowered 16 divisions of 196, 213 exploitation of 94 feminisation of the global labour force 258 ‘floating’ army of laid-off workers 60 geographical mobility of 59–60, 213 guild 160 import of 14 integration of peasant populations into 58 laws 59, 103 living standards 88–9 massive reserves 64 and new technologies 60 organisations 61 and politics of populist outrage 55–6 power of 12, 14, 15, 40–41, 103, 172 quality requirements 93 regulation of conditions of 59 rights 251 scarcity of 12, 59, 60 social divisions of 67 supply 47, 121 supply and demand for 60 surplus 5, 15, 215 ultimate power of the workforce 63, 101–2 unionised 108 unrest 66 labour markets geographically segmented 59 local 63 regulating dynamics of 60 labour power demand of 115 released as a commodity into the market place 58 and standard of living 62–3 supply of 63, 65, 115 value of 64 labour process 105 collective 104 resistance or inefficiencies in 47 labour unions 256 laissez faire 128 land capital embedded in the 191 enclosures 48 fertility 82 Israeli dispossession of Palestinian land 247 land use degradation 77 reform 249 rights 88 speculation 187–8 values 181, 182, 183, 234 landlords 40 laptops 131 Las Vegas, foreclosure crisis in 2 Latin America anti-neoliberal struggles 226 bilateral trade with China 173 and the Catholic Church 254 land bought up in 220 population growth 146 Latin American Southern Cone group (MERCOSUR) 200 Latvian government 37 Lazard’s 11 lead-based paints 74 ‘learned societies’ 91 Lebanon economic stimulus 140 rebuilding of 202 Leeson, Nicholas 37, 100, 190 Lefebvre, Henri 128 legitimation crises 217 Lehman Brothers 2, 5, 12, 21, 37, 132, 211 Leipzig, Germany 142 Lenin, Vladimir 46, 136, 227 Leningrad 243 Leninism 134 lesbians, and colonisation of urban neighbourhoods 247 leveraged buy-outs 50 leveraging 30, 31 Leverhulme foundation 44 life expectancy 137, 152, 250 limited companies 49 liquidity crisis in 206 liquidity injections vii, 261 liquidity trap 111 surplus 5, 28, 30 living standards 10, 46, 62–3, 72, 88–9, 96, 120 Locke, John 90, 233 London, territorial organisation of 196 London School of Economics vii, 235 Long Term Capital Management crash and bail-out (1998) 8, 100, 261 ‘long waves’ 96 Luddite movement 60, 96 Luxemburg, Rosa 108, 116–17 luxury goods 70, 110 M McCarthyism 169 machinery 66, 113, 114, 127 Mackinder, Sir Halford 209–10 macroeconomics 237 McVeigh, Timothy 248 Maddison, Angus 26 Mahan, A.T.: The Influence of Sea Power upon History 209 maintenance failures 86 Malaysia: resorts to capital controls 198 Malthus, Thomas 72, 94 Manchester 27 Mao Zedong 59 Cultural Revolution 137 dialectical sense of how contradictions worked 136 Great Leap Forward 137, 138, 250 health care 137 recognised that a revolution had to be permanent or nothing at all 136–7 Maoism 133 Maoists 253 Marcos, Imelda 43 Marcuse, Herbert 169 market laws 198 market share 43 markets credit 2, 5, 37 export 141, 218 free 10, 90, 100, 128, 131 internal 109 market connections 162–3 niches 131, 175 see also derivatives markets; futures markets; labour markets; options markets Marshall, Arthur 162 ‘Marshallian’ industrial production districts 162 Marx, Karl 46–7, 98, 110, 160, 232–3 and Bakunin 225 on barriers 84, 88 the capitalist creed 103 capitalist development 117 changing the world 119–20 on the cotton industry 67 and falling profitability 94 goal of 238 on an ‘industrial reserve army’58 and Keynes 111 and limitless money 47 and Luddite movement 96 on Malthus and Ricardo 72 on the power of the labourer 101–2 on ‘primitive accumulation’58, 249 and rent 81 and reproduction schemas 70 on the rise of capitalism 135, 250 systematic critique of capitalism and its crisis tendencies 237 understanding and transparency 99, 100 on the world of high finance 54–5 Capital 53–4, 70, 89, 119, 126, 237 Grundrisse der Kritik des Politischen Ökonomie 47, 155 Marx, Karl and Engels, Friedrich: The Communist Manifesto 89, 115, 127, 157, 237, 259 Marxian theory 56, 183 Marxists 253 Meadows, Donella h.: Limits to Growth 72 meat-based diets 73, 74 Medicare 28–9, 224 Mellon, Andrew 11, 98 mercantilism 206 merchant capitalists 40 mergers 49, 50 forced 261 Merrill Lynch 12 Merton, Robert 100 methane gas 73 Mexico debt crisis (1982) 10, 19 northern Miexico’s proximity to the US market 36 peso rescue 261 privatisation of telecommunications 29 and remittances 38 standard of living 10 Mexico City 243 microcredit schemes 145–6 microeconomics 237 microenterprises 145–6 microfinance schemes 145–6 Middle East, and oil issue 77, 170, 210 militarisation 170 ‘military-industrial complex’ 91 minorities: colonisation of urban neighbourhoods 247, 248 Mitterrand, François 198 modelling of markets 262 modernism 171 monarchy 249 monetarism 237 monetisation 244 money centralised money power 49–50, 52 a form of social power 43, 44 limitlessness of 43, 47 loss of confidence in the symbols/quality of money 114 universality of 106 monoculture 186 Monopolies Commission 52 monopolisation 43, 68, 95, 113, 116, 221 Monsanto 186 Montreal Protocol (1989) 76, 187 Morgan Stanley 19 Morishima, Michio 70 Morris, William 160 mortgages annual rate of change in US mortgage debt 7 mortgage finance for housing 170 mortgage-backed bonds futures 262 mortgage-backed securities 4, 262 secondary mortgage market 173, 174 securitisation of local 42 securitisation of mortgage debt 85 subprime 49, 174 Moses, Robert 169, 171, 177 MST (Brazil) 257 multiculturalism 131, 176, 231, 238, 258 Mumbai, India anti-Muslim riots (early 1990s) 247 redevelopment 178–9 municipal budgets 5 Museum of Modern Art, New York 21 Myrdal, Gunnar 196 N Nandigram, West Bengal 180 Napoleon III, Emperor 167, 168 national debt 48 National Economic Council (US) 11, 236 national-origin quotas 14 nationalisation 2, 4, 8, 224 nationalism 55–6, 143, 194, 204 NATO 203 natural gas 188 ‘natural limits’ 47 natural resources 30, 71 natural scarcity 72, 73, 78, 80, 83, 84, 121 nature and capital 88 ‘first nature’ 184 relation to 121, 122 ‘the revenge of nature’ 185 ‘second nature’ 184, 185, 187 as a social product 188 neocolonialism 208, 212 neoliberal counter-revolution 113 neoliberalism 10, 11, 19, 66, 131, 132, 141, 172, 175, 197, 208, 218, 224, 225, 233, 237, 243, 255 Nepal: communist rule in 226 Nevada, foreclosure wave in 1 New Deal 71 ‘new economy’ (1990s) 97 New Labour 45, 255 ‘new urbanism’ movement 175 New York City 11 September 2001 attacks 41 fiscal crisis (1975) 10, 172, 261 investment banks 19, 28 New York metropolitan region 169, 196 Nicaragua 189 Niger delta 251 non-governmental organisations (NGOs) 35, 253–4 non-interventionism 10 North Africa, French import of labour from 14 North America, settlement in 145 North American Free Trade Association (NAFTA) 200 Northern Ireland emergency 247 Northern Rock 2 Norway: Nordic cris (1992) 8 nuclear power 188 O Obama, Barack 11, 27, 34, 210 Obama administration 78, 121 O’Connor, Jim 77, 78 offshoring 131 Ogoni people 251 oil cheap 76–7 differential rent on oil wells 83 futures 83, 84 a non-renewable resource 82 ‘peak oil’ 38, 73, 78, 79, 80 prices 77–8, 80, 82–3, 261 and raw materials prices 6 rents 83 United States and 76–7, 79, 121, 170, 210, 261 OPEC (Organisation of Oil-Producing Countries) 83, 84 options markets currency 262 equity values 262 unregulated 99, 100 Orange County, California bankruptcy 100, 261 Organisation for Economic Cooperation and Development (OECD) 51 organisational change 98, 101 organisational forms 47, 101, 121, 127, 134, 238 Ottoman Empire 194 ‘over the counter’ trading 24, 25 overaccumulation crises 45 ozone hole 74 ozone layer 187 P Pakistan: US involvement 210 Palley, Thomas 236 Paris ‘the city of light’ 168 epicentre of 1968 confrontations 177, 243 Haussmann’s rebuilding of 49, 167–8, 169, 171, 176 municipal budget crashes (1868) 54 Paris Commune (1871) 168, 171, 176, 225, 243, 244 Partnoy, Frank: Ubfectious Greed 25 patents 221 patent laws 95 patriarchy 104 pensions pension funds 4, 5, 245 reneging on obligations 49 Péreire brothers 49, 54, 98, 174 pesticides 185, 186, 187 petty bourgeois 56 pharmaceutical sector 129, 245 philanthropy 44 Philippines: excessive urban development 8 Phillips, Kevin 206 Pinochet, General Augusto 15, 64 plant 58 Poland, lending to 19 political parties, radical 255–6 politics capitalist 76 class 62 co-revolutionary 241 commodified 219 depoliticised 219 energy 77 identity 131 labour organizing 255 left 255 transformative 207 pollution air 77 oceanic 74 rights 21 ‘Ponts et Chaussées’ organisation 92 Ponzi schemes 21, 114, 245, 246 pop music 245–6 Pope, Alexander 156 population growth 59, 72, 74, 121, 167 and capital accumulation 144–7 populism 55–6 portfolio insurance 262 poverty and capitalism 72 criminalisation and incarceration of the poor 15 feminisation of 15, 258 ‘Great Society’ anti-poverty programmes 32 Prague 243 prices commodity 37, 73 energy 78 food grain 79–80 land 8, 9, 182–3 oil 8, 28, 37–8, 77–8, 80, 82–3, 261 property 4, 182–3 raw material 37 reserve price 81–2 rising 73 share 7 primitive accumulation 58, 63–4, 108, 249 private consortia 50 private equity groups 50 private property and radical egalitarianism 233, 234 see also property markets; property rights; property values privatisation 10, 28, 29, 49, 251, 256, 257 pro-natal policies 59 production expansion of 112, 113 inadequate means of 47 investment in 114 liberating the concept 87 low-profit 29 offshore 16 production of urbanisation 87 reorganisation and relocation of 33 revolutionising of 89 surplus 45 technologies 101 productivity agreements 14, 60, 96 agricultural 119 cotton industry 67 gains 88, 89 Japan and West Germany 33 rising 96, 186 products development 95 innovation 95 new lines 94, 95 niches 94 profit squeeze 65, 66, 116 profitability constrains 30 falling 94, 131 of the financial sector 51 and wages 60 profits easy 15 excess 81, 90 falling 29, 72, 94, 116, 117 privatising 10 rates 70, 94, 101 realisation of 108 proletarianisation 60, 62 property markets crash in US and UK (1973–75) 8, 171–2, 261 overextension in 85 property market-led Nordic and Japanese bank crises 261 property-led crises (2007–10) 10, 261 real estate bubble 261 recession in UK (after 1987) 261 property rights 69, 81–2, 90, 122, 179, 198, 233, 244, 245 Property Share Price Index (UK) 7 property values 171, 181, 197, 248 prostitution 15 protectionism 31, 33, 43, 211 punctuated equilibrium theory of natural evolution 130 Putin, Vladimir 29, 80 Q Q’ing dynasty 194 quotas 16 R R&D (research and development) 92, 95–6 race issues 104 racism 61, 258 radical egalitarianism 230–34 railroads 42, 49, 191 Railwan, rise of (1970s) 35 rare earth metals 188 raw materials 6, 16, 37, 58, 77, 101, 113, 140, 144, 234 RBS 20 Reagan, Ronald 15, 64, 131, 141 Reagan-Thatcher counter revolution (early 1980s) 71 Reagan administration 1, 19 Reagan recession (1980–82) 60, 261 Real Estate Investment Trusts (US) 7 recession 1970s 171–2 language of 27 Reagan (1980–82) 60, 261 Red Brigade 254 reforestation 184 refrigeration 74 reinvestment 43, 45, 66–7, 110–12, 116 religious fundamentalism 203 religious issues 104 remittances 38, 140, 147 rentiers 40 rents differential rent 81, 82, 83 on intellectual property rights 221 land 182 monetisation of 48, 109 monopoly 51, 81–2, 83 oil 83 on patents 221 rising 181 reproduction schemas 70 Republican Party (US) 11, 141 reserve price 81 resource values 234 Ricardo, David 72, 94 risks, socialising 10 robbery 44 Robinson, Joan 238 robotisation 14, 136 Rockefeller, John D. 98 Rockefeller brothers 131 Rockefeller foundation 44, 186 Roman Empire 194 Roosevelt, Franklin D. 71 Rothschild family 98, 163 Royal Society 91, 156 royalties 40 Rubin, Robert 98 ‘rule of experts’ 99, 100–101 Russia bankruptcy (1998) 246, 261 capital flight crisis 261 defaults on its debt (1998) 6 oil and natural gas flow to Ukraine 68 oil production 6 oligarchs 29 see also Soviet Union S Saddam Hussein 210 Saint-Simon, Claude Henri de Rouvroy, Comte de 49 Saint-Simonians 87, 168 Salomon Brothers 24 Samuelson, Robert 235, 239 Sandino, Augusto 189 Sanford, Charles 98 satellites 156 savings 140 Scholes, Myron 100 Schumer, Charles 11 Schumpeter, Joseph 46 Seattle battle of (1999) 38, 227 general strike (1918) 243 software development in 195 Second World War 32, 168–70, 214 sectarianism 252 securitisation 17, 36, 42 Sejong, South Korea 124–6 service industries 41 sexism 61 sexual preferences issues 104, 131, 176 Shanghai Commune (1967) 243 shark hunting 73, 76 Shell Oil 79, 251 Shenzhen, China 36 shop floor organisers (shop stewards) 103 Silicon Valley 162, 195, 216 Singapore follows Japanese model 92 industrialisation 68 rise of (1970s) 35 slavery 144 domestic 15 slums 16, 151–2, 176, 178–9 small operators, dispossession of 50 Smith, Adam 90, 164 The Wealth of Nations 35 social democracy 255 ‘social democratic’ consensus (1960s) 64 social inequality 224 social relations 101, 102, 104, 105, 119, 121, 122, 123, 126, 127, 135–9, 152, 240 loss of 246 social security 224 social services 256 social struggles 193 social welfarism 255 socialism 136, 223, 228, 242, 249 compared with communism 224 solidarity economy 151, 254 Soros, George 44, 98, 221 Soros foundation 44 South Korea Asian Currency Crisis 261 excessive urban development 8 falling exports 6 follows Japanese model 92 rise of (1970s) 35 south-east Asia: crash of 1997–8 6, 8, 49, 246 Soviet Union in alliance with US against fascism 169 break-up of 208, 217, 227 collapse of communism 16 collectivisation of agriculture 250 ‘space race’ (1960s and 1970s) 156 see also Russia space domination of 156–8, 207 fixed spaces 190 ‘space race’ (1960s and 1970s) 156 Spain property-led crisis (2007–10) 5–6, 261 unemployment 6 spatial monopoly 164–5 special drawing rights 32, 34 special economic zones 36 special investment vehicles 36, 262 special purpose entities 262 speculation 52–3 speculative binges 52 speed-up 41, 42 stagflation 113 stagnation 116 Stalin, Joseph 136, 250 Standard Oil 98 state formation 196, 197, 202 state-corporate nexus 204 ‘space race’ (1960s and 1970s) 156 state-finance nexus 204, 205, 237, 256 blind belief in its corrective powers 55 ‘central nervous system’ for capital accumulation 54 characteristics of a feudal institution 55 and the current crisis 118 defined 48 failure of 56–7 forms of 55 fusion of state and financial powers 115 innovation in 85 international version of 51 overwhelmed by centralised credit power 52 pressure on 54 radical reconstruction of 131 role of 51 and state-corporate research nexus 97 suburbanisation 171 tilts to favour particular interests 56 statistical arbitrage strategies 262 steam engine, invention of 78, 89 Stiglitz, Joseph 45 stimulus packages 261 stock markets crash (1929) 211, 217 crashes (2001–02) 261 massive liquidity injections (1987) 236, 261 Stockton, California 2 ’structural adjustment’ programmes vii, 19, 261 subcontracting 131 subprime loans 1 subprime mortgage crisis 2 substance abuse 151 suburbanisation 73, 74, 76–7, 106–7, 169, 170, 171, 181 Summers, Larry 11, 44–5, 236 supermarket chains 50 supply-side theory 237 surveillance 92, 204 swaps credit 21 Credit Default 24, 262 currency 262 equity index 262 interest rate 24, 262 Sweden banking system crash (1992) 8, 45 Nordic crisis 8 Yugoslav immigrants 14 Sweezey, Paul 52, 113 ‘switching crises’ 93 systematic ‘moral hazard’ 10 systemic risks vii T Taipei: computer chips and household technologies in 195 Taiwan falling exports 6 follows Japanese model 92 takeovers 49 Taliban 226 tariffs 16 taxation 244 favouring the rich 45 inheritance 44 progressive 44 and the state 48, 145 strong tax base 149 tax rebates 107 tax revenues 40 weak tax base 150 ‘Teamsters for Turtles’ logo 55 technological dynamism 134 technologies change/innovation/new 33, 34, 63, 67, 70, 96–7, 98, 101, 103, 121, 127, 134, 188, 193, 221, 249 electronic 131–2 ‘green’ 188, 221 inappropriate 47 labour fights new technologies 60 labour-saving 14–15, 60, 116 ‘rule of experts’ 99, 100–101 technological comparative edge 95 transport 62 tectonic movements 75 territorial associations 193–4, 195, 196 territorial logic 204–5 Thailand Asian Currency Crisis 261 excessive urban development 8 Thatcher, Margaret, Baroness 15, 38, 64, 131, 197, 255 Thatcherites 224 ‘Third Italy’, Bologna 162, 195 time-space compression 158 time-space configurations 190 Toys ‘R’ Us 17 trade barriers to 16 collapses in foreign trade (2007–10) 261 fall in global international trade 6 increase in volume of trading 262 trade wars 211 trade unions 63 productivity agreements 60 and US auto industry 56 trafficking human 44 illegal 43 training 59 transport costs 164 innovations 42, 93 systems 16, 67 technology 62 Treasury Bill futures 262 Treasury bond futures 262 Treasury instruments 262 TRIPS agreement 245 Tronti, Mario 102 Trotskyists 253, 255 Tucuman uprising (1969) 243 Turin: communal ‘houses of the people’ 243 Turin Workers Councils 243 U UBS 20 Ukraine, Russian oil and natural gas flow to 68 ultraviolet radiation 187 UN Declaration of Human Rights 234 UN development report (1996) 110 Un-American Activities Committee hearings 169 underconsumptionist traditions 116 unemployment 131, 150 benefits 60 creation of 15 in the European Union 140 job losses 93 lay-offs 60 mass 6, 66, 261 rising 15, 37, 113 and technological change 14, 60, 93 in US 5, 6, 60, 168, 215, 261 unionisation 103, 107 United Fruit Company 189 United Kingdom economy in serious difficulty 5 forced to nationalise Northern Rock 2 property market crash 261 real average earnings 13 train network 28 United Nations 31, 208 United States agricultural subsidies 79 in alliance with Soviet Union against fascism 169 anti-trust legislation 52 auto industry 56 blockbusting neighbourhoods 248 booming but debt-filled consumer markets 141 and capital surplus absorption 31–2 competition in labour markets 61 constraints to excessive concentration of money power 44–5 consumerism 109 conumer debt service ratio 18 cross-border leasing with Germany 142–3 debt 158, 206 debt bubble 18 fiscal crises of federal, state and local governments 261 health care 28–9 heavy losses in derivatives 261 home ownership 3 housing foreclosure crises 1–2, 4, 38, 166 industries dependent on trade seriously hit 141 interventionism in Iraq and Afghanistan 210 investment bankers rescued 261 investment failures in real estate 261 lack of belief in theory of evolution 129 land speculation scheme 187–8 oil issue 76–7, 79, 80, 121, 170, 210, 261 population growth 146 proletarianisation 60 property-led crisis (2007–10) 261 pursuit of science and technology 129 radical anti-authoritarianism 199 Reagan Recession 261 rescue of financial institutions 261 research universities 95 the reversing origins of US corporate profits (1950–2004) 22 the right to the city movement 257 ‘right to work’ states 65 savings and loan crisis (1984–92) 8 secondary mortgage market 173 ‘space race’ (1960s and 1970s) 156 suburbs 106–7, 149–50, 170 train network 28 unemployment 5, 6, 60, 168, 215, 261 unrestricted capitalist development 113 value of US stocks and homes, as a percentage of GDP 22 and Vietnam War 171 wages 13, 62 welfare provision 141 ‘urban crisis’ (1960s) 170 urban ‘heat islands’ 77 urban imagineering 193 urban social movements 180 urbanisation 74, 85, 87, 119, 131, 137, 166, 167, 172–3, 174, 240, 243 US Congress 5, 169, 187–8 US Declaration of Independence 199 US National Intelligence Council 34–5 US Senate 79 US Supreme Court 179 US Treasury and Goldman Sachs 11 rescue of Continental Illinois Bank 261 V Vanderbilt family 98 Vatican 44 Veblen, Thorstein 181–2 Venezuela 256 oil production 6 Vietnam War 32, 171 Volcker, Paul 2, 236 Volcker interest rate shock 261 W wage goods 70, 107, 112, 162 wages and living standards 89 a living wage 63 national minimum wage 63 rates 13, 14, 59–64, 66, 109 real 107 repression 12, 16, 21, 107, 110, 118, 131, 172 stagnation 15 wage bargaining 63 Wal-Mart 17, 29, 64, 89 Wall Street, New York 35, 162, 200, 219, 220 banking institutions 11 bonuses 2 ‘Party of Wall Street’ 11, 20, 200 ‘War on Terror’ 34, 92 warfare 202, 204 Wasserstein, Bruce 98 waste disposal 143 Watt, James 89 wealth accumulation by capitalist class interests 12 centralisation of 10 declining 131 flow of 35 wealth transfer 109–10 weather systems 153–4 Weather Underground 254 Weill, Sandy 98 Welch, Jack 98 Westphalia, Treaty of (1648) 91 Whitehead, Alfred North 75 Wilson, Harold 56 wind turbines 188 women domestic slavery 15 mobilisation of 59, 60 prostitution 15 rights 176, 251, 258 wages 62 workers’ collectives 234 working hours 59 World Bank 36, 51, 69, 192, 200, 251 ‘Fifty Years is Enough’ campaign 55 predicts negative growth in the global economy 6 World Bank Development Report (2009) 26 World Trade Organisation (WTO) 200, 227 agreements 69 street protests against (Seattle, 1999) 55 TRIPS agreement 245 and US agricultural subsidies 79 WorldCom 8, 100, 261 worldwide web 42 Wriston, Walter 19 X X-rays 99 Y Yugoslavia dissolution of 208 ethnic cleansings 247 Z Zapatista revolutionary movement 207, 226, 252 Zola, Émile 53 The Belly of Paris 168 The Ladies’ Paradise 168

 

pages: 356 words: 103,944

The Globalization Paradox: Democracy and the Future of the World Economy by Dani Rodrik

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affirmative action, Asian financial crisis, bank run, banking crisis, bilateral investment treaty, borderless world, Bretton Woods, British Empire, capital controls, Carmen Reinhart, central bank independence, collective bargaining, colonial rule, Corn Laws, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, Doha Development Round, en.wikipedia.org, eurozone crisis, financial deregulation, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, George Akerlof, guest worker program, Hernando de Soto, immigration reform, income inequality, income per capita, joint-stock company, Kenneth Rogoff, labour market flexibility, labour mobility, land reform, Long Term Capital Management, low skilled workers, margin call, market bubble, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, microcredit, Monroe Doctrine, moral hazard, night-watchman state, non-tariff barriers, offshore financial centre, oil shock, open borders, open economy, price stability, profit maximization, race to the bottom, regulatory arbitrage, savings glut, Silicon Valley, special drawing rights, special economic zone, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tobin tax, too big to fail, trade liberalization, trade route, transaction costs, tulip mania, Washington Consensus, World Values Survey

It didn’t hurt of course that Prince Rupert was family to Charles II. On May 2, 1670, the crown granted Prince Rupert and his partners a charter which established “the Governour and Company of Merchants-Adventurers Trading into Hudson’s Bay.” The company thereby created eventually came to be known as Hudson’s Bay Company. It survives to this day as HBC, Canada’s largest general retailer, which makes it also the world’s oldest joint stock company. The charter Charles II granted to Hudson’s Bay Company is an extraordinary document that confers enormous powers on the company. The king begins by commending his “beloved cousin” Prince Rupert and his associates for having led the expedition to Hudson’s Bay “at their own great cost” and for having discovered “considerable commodities,” which will produce “great advantage to us and our Kingdom.”

According to one estimate, international trade rose at more than double the rate of world incomes in this period.7 The companies that made this trade possible were mostly chartered trading monopolies organized along lines similar to Hudson’s Bay Company. Many have well-recognized names, such as the English East India Company and the Dutch East India Company, and many have left significant marks on history. The most famous among them, the English East India Company, or the “Governor and Company of Merchants of London Trading into the East Indies,” as it was originally called, was chartered in 1600 as a joint stock company. Its monopoly covered trade with the Indian subcontinent and China (including opium trade). As with the Hudson’s Bay Company, its powers extended considerably beyond trade. It had a standing army, could make war, enter into treaties, mint its currency, and administer justice. It expanded its control over India through a series of armed confrontations with the Mughal Empire and alliances with local rulers.

 

pages: 261 words: 86,905

How to Speak Money: What the Money People Say--And What It Really Means by John Lanchester

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asset allocation, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, blood diamonds, Bretton Woods, BRICs, Capital in the Twenty-First Century by Thomas Piketty, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collective bargaining, credit crunch, Credit Default Swap, crony capitalism, Dava Sobel, David Graeber, disintermediation, double entry bookkeeping, en.wikipedia.org, estate planning, financial innovation, Flash crash, forward guidance, Gini coefficient, global reserve currency, high net worth, High speed trading, hindsight bias, income inequality, inflation targeting, interest rate swap, Isaac Newton, Jaron Lanier, joint-stock company, joint-stock limited liability company, Kodak vs Instagram, liquidity trap, London Interbank Offered Rate, London Whale, loss aversion, margin call, McJob, means of production, microcredit, money: store of value / unit of account / medium of exchange, moral hazard, neoliberal agenda, New Urbanism, Nick Leeson, Nikolai Kondratiev, Nixon shock, Northern Rock, offshore financial centre, oil shock, open economy, paradox of thrift, Plutocrats, plutocrats, Ponzi scheme, purchasing power parity, pushing on a string, quantitative easing, random walk, rent-seeking, reserve currency, Richard Feynman, Richard Feynman, road to serfdom, Ronald Reagan, Satoshi Nakamoto, security theater, shareholder value, Silicon Valley, six sigma, South Sea Bubble, sovereign wealth fund, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, trickle-down economics, Washington Consensus, working poor, yield curve

When the company loses all its money, it goes broke; before limited liability, the investors in the company would then be personally liable for any outstanding debts, and could end up bankrupt. The invention of limited liability was central to the creation of the joint stock company, which is the basis of modern capitalism: the company is a legal entity, like a person, in which shareholders have shares and exercise control in proportion to the number of shares they own. You can have a company without having limited liability; in the United States, a joint stock company in its modern sense is just that. In the UK, this structure is called unlimited liability. It obviously makes the shareholders a lot more careful, since they are on the hook for all losses, not just the losses up to the point where the company goes broke.

 

pages: 725 words: 221,514

Debt: The First 5,000 Years by David Graeber

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Admiral Zheng, anti-communist, back-to-the-land, banks create money, Bretton Woods, British Empire, carried interest, cashless society, central bank independence, colonial rule, corporate governance, David Graeber, delayed gratification, dematerialisation, double entry bookkeeping, financial innovation, full employment, George Gilder, informal economy, invention of writing, invisible hand, Isaac Newton, joint-stock company, means of production, microcredit, money: store of value / unit of account / medium of exchange, moral hazard, oil shock, payday loans, place-making, Ponzi scheme, price stability, profit motive, reserve currency, Ronald Reagan, seigniorage, short selling, Silicon Valley, South Sea Bubble, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transatlantic slave trade, transatlantic slave trade, tulip mania, upwardly mobile, urban decay, working poor

Some even talk about “monastic capitalism.”171 Still, the ground was only really prepared for capitalism in the familiar sense of the term when the merchants began to organize themselves into eternal bodies as a way to win monopolies, legal or de facto, and avoid the ordinary risks of trade. An excellent case in point was the Society of Merchant Adventurers, charted by King Henry IV in London in 1407, who, despite the romantic-sounding name, were mainly in the business of buying up British woolens and selling them in the Flanders fairs. They were not a modern joint-stock company, but a rather old-fashioned Medieval merchant guild, but they provided a structure whereby older, more substantial merchants could simply provide loans to younger ones, and they managed to secure enough of an exclusive control over the woolen trade that substantial profits were pretty much guaranteed.172 When such companies began to engage in armed ventures overseas, though, a new era of human history might be said to have begun.

Its collapse was followed the next year by the collapse of John Law’s famous Banque Royale in France, another central-bank experiment—similar to the Bank of England—that grew so quickly that within a few years it had absorbed all the French colonial trading companies, and most of the French crown’s own debt, issuing its own paper money, before crashing into nothingness in 1721, sending its chief executive fleeing for his life. In each case, this was followed by legislation: in Britain, to forbid the creation of new joint-stock companies (other than for the building of turnpikes and canals), and in France, to eliminate paper money based in government debt entirely. It’s unsurprising, then, that Newtonian economics (if we may call it that)—the assumption that one cannot simply create money, or even, really, tinker with it—came to be accepted by almost everyone. There had to be some solid, material foundation to all this, or the entire system would go insane.

Charles MacKay has left us some immortal descriptions of the first of these, the famous “South Sea Bubble” of 1710. Actually, the South Sea Company itself (which grew so large that at one point it bought up most of the national debt) was just the anchor for what happened, a giant corporation, its stock constantly ballooning in value, that seemed, to put it in contemporary terms, “too big to fail.” It soon became the model for hundreds of new start-up offerings: Innumerable joint-stock companies started up everywhere. They soon received the name Bubbles, the most appropriate imagination could devise … Some of them lasted a week or a fortnight, and were no more heard of, while others could not even live out that span of existence. Every evening produced new schemes, and every morning new projects. The highest of the aristocracy were as eager in this hot pursuit of gain as the most plodding jobber in Cornhill.89 The author lists, as arbitrary examples, eighty-six schemes, ranging from the manufacture of soap or sailcloth, the provision of insurance for horses, to a method to “make deal-boards out of sawdust.”

 

pages: 540 words: 168,921

The Relentless Revolution: A History of Capitalism by Joyce Appleby

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1919 Motor Transport Corps convoy, agricultural Revolution, anti-communist, Asian financial crisis, asset-backed security, Bartolomé de las Casas, Bernie Madoff, Bretton Woods, BRICs, British Empire, call centre, collateralized debt obligation, collective bargaining, Columbian Exchange, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, deskilling, Doha Development Round, double entry bookkeeping, epigenetics, equal pay for equal work, European colonialism, facts on the ground, failed state, Firefox, Ford paid five dollars a day, Francisco Pizarro, Frederick Winslow Taylor, full employment, Gordon Gekko, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Hernando de Soto, hiring and firing, illegal immigration, informal economy, interchangeable parts, interest rate swap, invention of movable type, invention of the printing press, invention of the steam engine, invisible hand, Isaac Newton, James Hargreaves, James Watt: steam engine, Jeff Bezos, joint-stock company, Joseph Schumpeter, knowledge economy, land reform, Livingstone, I presume, Long Term Capital Management, Mahatma Gandhi, Martin Wolf, moral hazard, Ponzi scheme, profit maximization, profit motive, race to the bottom, Ralph Nader, refrigerator car, Ronald Reagan, Scramble for Africa, Silicon Valley, Silicon Valley startup, South China Sea, South Sea Bubble, special economic zone, spice trade, spinning jenny, strikebreaker, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thorstein Veblen, total factor productivity, trade route, transatlantic slave trade, transatlantic slave trade, transcontinental railway, union organizing, Unsafe at Any Speed, Upton Sinclair, urban renewal, War on Poverty, working poor, Works Progress Administration, Yogi Berra, Yom Kippur War

Borrowed from the Italians, this form of corporate enterprise was unknown in Spain or Portugal. Unlike the merchant companies composed of active traders, members of a joint-stock trading company subscribed to a certain number of shares in the company. For the English gentleman or woman here was a chance to become a part of a profitable venture without taking an active part in it. Dozens of such joint-stock companies, with royal charters, were pushing out the boundaries of interregional trade. Members of the English aristocracy showed a decided preference for companies that established colonies or pioneered trades that would enhance England’s status in the world. Commerce had champions in the highest circles of society, and the House of Commons included merchants among its members. Because of this, English law changed faster than the glacial pace set elsewhere.

In the Muslim world Koranic injunctions hindered the formation of corporations and the inheritance of partnerships. Deaths could dissolve partnerships and pools of capital without the legal instrument of incorporation.33 Being unable to bequeath a firm’s shares often made it impossible to maintain businesses. Unlike Muslim countries, Europeans developed financial institutions especially for handling investment money. German banks began as private institutions, becoming joint-stock companies later. As so-called universal banks they offered a range of financial services from extending short-term credit to taking deposits, discounting bills, selling insurance, and handling mortgages while underwriting and trading in securities.34 Britain industrialized at the leisurely pace of a pathbreaker. Most of its financing came from personal savings and the shrewd reinvestment of profits.

Almost fifty million new vehicles roll out of auto plants worldwide every year, making it the number one industry.15 The Japanese were astute marketers of their cars, which helps explain how Toyota was able in 2008 to pass up General Motors after its seventy-seven-year run as the world’s largest automaker. The structure of European economies is corporate with the interests of labor and management worked on together through public and private organizations. That of the United States is more competitive than corporate, and we can characterize the Japanese economy as paternalistic. Its most prominent firms appear like an extended family with joint-stock companies running specific enterprises under the benevolent guidance of its holding company. This arrangement offered protection from hostile takeovers. Paternalism shouldn’t be confused with patriarchal, for unlike America’s hierarchical decision making, in Japanese companies, ideas percolate up from the bottom. Middle and local managers make many of the operational moves; all focus on cultivating skills and talent from within with eyes on long-term growth.16 Rather than members of a cartel for a single industry, Japanese firms belong to holding companies, but the competition among the parts of such a company can be fierce.

 

pages: 651 words: 180,162

Antifragile: Things That Gain From Disorder by Nassim Nicholas Taleb

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Air France Flight 447, Andrei Shleifer, banking crisis, Benoit Mandelbrot, Berlin Wall, Black Swan, credit crunch, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, discrete time, double entry bookkeeping, Emanuel Derman, epigenetics, financial independence, Flash crash, Gary Taubes, Gini coefficient, Henri Poincaré, high net worth, Ignaz Semmelweis: hand washing, informal economy, invention of the wheel, invisible hand, Isaac Newton, James Hargreaves, Jane Jacobs, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, Lao Tzu, Long Term Capital Management, loss aversion, Louis Pasteur, mandelbrot fractal, meta analysis, meta-analysis, microbiome, moral hazard, mouse model, Norbert Wiener, pattern recognition, placebo effect, Ponzi scheme, principal–agent problem, purchasing power parity, quantitative trading / quantitative finance, Ralph Nader, random walk, Ray Kurzweil, rent control, Republic of Letters, Ronald Reagan, Rory Sutherland, Silicon Valley, six sigma, spinning jenny, statistical model, Steve Jobs, Steven Pinker, Stewart Brand, stochastic process, stochastic volatility, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, transaction costs, urban planning, Yogi Berra, Zipf's Law

Many right-wingers-in-love-with-large-corporations keep citing Adam Smith, famous patron saint of “capitalism,” a word he never uttered, without reading him, using his ideas in a self-serving selective manner—ideas that he most certainly did not endorse in the form they are presented.4 In Book IV of The Wealth of Nations, Smith was extremely chary of the idea of giving someone upside without downside and had doubts about the limited liability of joint-stock companies (the ancestor of the modern limited liability corporation). He did not get the idea of transfer of antifragility, but he came close enough. And he detected—sort of—the problem that comes with managing other people’s business, the lack of a pilot on the plane: The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own. Further, Smith is even suspicious of their economic performance as he writes: “Joint-stock companies for foreign trade have seldom been able to maintain the competition against private adventurers.”

Now, worse: Nokia, who used to be the top mobile phone maker, began as a paper mill (at some stage they were into rubber shoes). DuPont, now famous for Teflon nonstick cooking pans, Corian countertops, and the durable fabric Kevlar, actually started out as an explosives company. Avon, the cosmetics company, started out in door-to-door book sales. And, the strangest of all, Oneida Silversmiths was a community religious cult but for regulatory reasons they needed to use as cover a joint stock company. THE INVERSE TURKEY PROBLEM Now some plumbing behind what I am saying—epistemology of statistical statements. The following discussion will show how the unknown, what you don’t see, can contain good news in one case and bad news in another. And in Extremistan territory, things get even more accentuated. To repeat (it is necessary to repeat because intellectuals tends to forget it), evidence of absence is not absence of evidence, a simple point that has the following implications: for the antifragile, good news tends to be absent from past data, and for the fragile it is the bad news that doesn’t show easily.

 

pages: 537 words: 200,923

City: Urbanism and Its End by Douglas W. Rae

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agricultural Revolution, barriers to entry, business climate, City Beautiful movement, complexity theory, desegregation, edge city, ghettoisation, income per capita, informal economy, interchangeable parts, invisible hand, James Watt: steam engine, Jane Jacobs, joint-stock company, Joseph Schumpeter, manufacturing employment, New Economic Geography, new economy, New Urbanism, Plutocrats, plutocrats, Saturday Night Live, the built environment, The Death and Life of Great American Cities, the market place, urban planning, urban renewal, War on Poverty, white flight, Works Progress Administration

The old technology kept the firms small by making it very difficult to organize large plants around intensive energy consumption—and kept upriver energy consumption at a distance from easy and cheap means of distribution. Moreover, the going pattern of economic organization made it difficult to amass capital in quantities required by large-scale factories. The standard forms of ownership were sole proprietorship and partnership, both of which typically required that the direct operators of a firm also be its equity investors.36 The coming dominance of the joint stock company in the years after 1840 would change that irrevocably. Agriculture also limited centralization. Agricultural energy could beat either of two principal paths into the economy—either as work done by animal muscle or as vegetable foodstuffs consumed by those animals whose muscle-power would perform work. Neither could be generated without access to wide open spaces and good soil, either for grazing or for cultivation.

Even Mayor Rice was an immigrant of sorts, his family having moved from Vermont to rural Massachusetts to nearby Cheshire and thence (during his childhood) to New Haven. These immigrants—along with thousands more arriving from the American hinterlands—captured both manufacturing jobs and spin-off entrepreneurial niches created by the former. At the center of the urban economy were 143 fairly large manufacturing concerns organized as joint stock companies. These incorporated firms stood in sharp contrast to sole proprietorships and partnerships because many of them were capable of raising capital in increasing quantities and of operating large plants sending products to markets on a national and even international scale. The largest—Sargent Hardware, Winchester Repeating Arms, and New Haven Clock—operated almost as cities unto themselves.

The Bigelow family was living in New Haven in 1910. Sperry & Barnes was a meat-packing firm handling about 200,000 hogs per year. The firm was, by 1910, controlled by Armour & Company of Chicago. Peck Brothers & Company manufactured plumbers’ materials and fittings for the distribution of water, steam, and gas. Like Sargent, Peck Brothers operated sales offices in Chicago, New York, and Boston. This joint stock company had reached $720,000 in capitalization by 1897. A lesser number of major manufacturing operations were in fact branches of companies grounded in other cities. These were exceptions to the New Haven pattern of 1910–16: the plants were owned by corporations with no grounded connection with the city. Their top management was located elsewhere, and their ownership was generally outside Connecticut.

 

pages: 489 words: 111,305

How the World Works by Noam Chomsky, Arthur Naiman, David Barsamian

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affirmative action, anti-communist, Ayatollah Khomeini, Berlin Wall, Bernie Sanders, Bretton Woods, British Empire, business climate, capital controls, clean water, corporate governance, deindustrialization, Fall of the Berlin Wall, feminist movement, glass ceiling, Howard Zinn, income inequality, interchangeable parts, Isaac Newton, joint-stock company, labour market flexibility, land reform, Monroe Doctrine, offshore financial centre, Plutocrats, plutocrats, race to the bottom, Ralph Nader, Ronald Reagan, Rosa Parks, single-payer health, strikebreaker, Telecommunications Act of 1996, transfer pricing, union organizing, War on Poverty, working poor

Those ideas, which run straight through to Dewey, are deeply anticapitalist in character. Adam Smith didn’t call himself an anticapitalist because, back in the eighteenth century, he was basically precapitalist, but he had a good deal of skepticism about capitalist ideology and practice—even about what he called “joint stock companies” (what we call corporations today, which existed in quite a different form in his day). He worried about the separation of managerial control from direct participation, and he also feared that these joint stock companies might turn into “immortal persons.” This indeed happened in the nineteenth century, after Smith’s death [under current law, corporations have even more rights than individuals, and can live forever]. It didn’t happen through parliamentary decisions—nobody voted on it in Congress.

 

pages: 427 words: 124,692

Empire: What Ruling the World Did to the British by Jeremy Paxman

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British Empire, call centre, Cape to Cairo, colonial rule, conceptual framework, Etonian, European colonialism, Fellow of the Royal Society, imperial preference, joint-stock company, Khartoum Gordon, Kibera, land tenure, Livingstone, I presume, offshore financial centre, polynesian navigation, Scramble for Africa, transatlantic slave trade

The English purpose in Ireland, argued Sir Thomas Smith, was no different to that of the Romans when they first encountered the primitive ancient Britons. The Irish were culturally inferior to the English, and, he advised his son as he left for Ulster, the English should follow the models of Rome, Carthage and Venice. The principles of colonization in Ireland were applied in North America, too. Many of the financial mechanisms – the creation of joint-stock companies, for example – were similar. Attitudes towards the indigenous peoples also echoed: like the Irish, native Americans were considered lazy, unsophisticated and feckless – adjectives which the British used of natives in plenty of later colonies. But these settlements in the Americas were quite unlike most of the later colonies in Africa or the South Seas. Elsewhere, while English might be the formal language of government, it existed alongside local languages, customs and hierarchies.

I: The Origins of Empire, British Overseas Enterprise to the Close of the Seventeenth Century (Oxford and New York, 1998) ____, ‘To Establish a Common Wealthe: Captain John Smith as New World Colonist’, Virginia Magazine of History and Biography 96 (1988) Carlos, Ann M. and Stephen Nicholas, ‘ “Giants of an Earlier Capitalism”: The Chartered Trading Companies as Modern Multinationals’, Business History Review 62 (1988) ____, ‘Theory and History: Seventeenth-Century Joint-Stock Chartered Trading Companies’, Journal of Economic History 56 (1996) Cassell, John, John Frederick Smith and William Howitt, Cassell’s Illustrated History of England, 9 vols. (London, 1906) Chamberlain, Joseph, Mr Chamberlain’s Speeches, ed. Charles W. Boyd, 2 vols. (London, 1914) Chatterton, Edward Keble, Britain’s Record: What She Has Done for the World (London, 1911) Chaudhuri, K., The English East India Company: The Study of an Early Joint Stock Company, 1600–1640 (London, 1965) Chaudhuri, Sashi Bhusan, English Historical Writings on the Indian Mutiny (Calcutta, 1979) Chen, Jeng-Guo S., ‘Gendering India: Effeminacy and the Scottish Enlightenment’s Debates over Virtue and Luxury’, Eighteenth Century 51 (2010) Chesterton, G. K., The New Jerusalem (London 1920) Chitty, Susan, Playing the Game: A Biography of Sir Henry Newbolt (London, 1997) Churchill, Winston, Blood, Toil, Tears and Sweat: Winston Churchill’s Famous Speeches, ed.

 

pages: 487 words: 147,891

McMafia: A Journey Through the Global Criminal Underworld by Misha Glenny

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anti-communist, Anton Chekhov, Berlin Wall, blood diamonds, BRICs, colonial rule, crony capitalism, Deng Xiaoping, Doha Development Round, failed state, Fall of the Berlin Wall, financial deregulation, Firefox, forensic accounting, friendly fire, glass ceiling, illegal immigration, joint-stock company, market bubble, Mikhail Gorbachev, Nick Leeson, offshore financial centre, place-making, rising living standards, Ronald Reagan, Skype, special economic zone, Stephen Hawking, trade liberalization, trade route, Transnistria, unemployed young men, upwardly mobile

Under pressure from Gorbachev, the Bulgarian Communist Party had passed Decree 56, which overnight allowed the creation of private enterprises in Bulgaria, known as joint-stock companies. Many in the party, still hard-liners, were shocked by this development, as it looked like the thin end of a capitalist wedge. But the state security services, which habitually subordinated ideology to the love of power, took it in their stride. “When I looked at the trade register for 1986, it struck me,” explained Stanimir Vaglenov, a Bulgarian journalist who specializes in corruption and organized crime, “the security services founded the first company a week after Decree 56 came into effect. And within the first year, members of the DS had founded 90 percent of the new joint-stock companies!” While the bulk of Bulgaria’s long-suffering population was still being force-fed the rhetoric about socialism’s bright and eternal future, the regime’s most senior representatives were teaching themselves how to make money.

 

pages: 790 words: 150,875

Civilization: The West and the Rest by Niall Ferguson

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Admiral Zheng, agricultural Revolution, Albert Einstein, Andrei Shleifer, Atahualpa, Ayatollah Khomeini, Berlin Wall, BRICs, British Empire, clean water, collective bargaining, colonial rule, conceptual framework, Copley Medal, corporate governance, credit crunch, David Ricardo: comparative advantage, Dean Kamen, delayed gratification, Deng Xiaoping, discovery of the americas, Dissolution of the Soviet Union, European colonialism, Fall of the Berlin Wall, Francisco Pizarro, full employment, Hans Lippershey, haute couture, Hernando de Soto, income inequality, invention of movable type, invisible hand, Isaac Newton, James Hargreaves, James Watt: steam engine, John Harrison: Longitude, joint-stock company, Joseph Schumpeter, land reform, land tenure, Louis Pasteur, Mahatma Gandhi, market bubble, Martin Wolf, means of production, megacity, Mikhail Gorbachev, new economy, probability theory / Blaise Pascal / Pierre de Fermat, profit maximization, purchasing power parity, quantitative easing, rent-seeking, reserve currency, road to serfdom, Ronald Reagan, savings glut, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special economic zone, spice trade, spinning jenny, Steve Jobs, Steven Pinker, The Great Moderation, the market place, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Thorstein Veblen, total factor productivity, trade route, transaction costs, transatlantic slave trade, transatlantic slave trade, upwardly mobile, uranium enrichment, wage slave, Washington Consensus, women in the workforce, World Values Survey

Measured in terms of grams of silver per head, the rulers of England and France were able to collect far more in taxation than their Chinese counterpart throughout the period from 1520 to 1630.28 Beginning in thirteenth-century Italy, Europeans also began to experiment with unprecedented methods of government borrowing, planting the seeds of modern bond markets. Public debt was an institution wholly unknown in Ming China and only introduced under European influence in the late nineteenth century. Another fiscal innovation of world-changing significance was the Dutch idea of granting monopoly trading rights to joint-stock companies in return for a share of their profits and an understanding that the companies would act as naval subcontractors against rival powers. The Dutch East India Company, founded in 1602, and its eponymous English imitator were the first true capitalist corporations, with their equity capital divided into tradable shares paying cash dividends at the discretion of their directors. Nothing resembling these astoundingly dynamic institutions emerged in the Orient.

‘Old Corruption’ was how the radical polemicist William Cobbett characterized the way parliament, the Crown and the City interacted. In Bleak House (1852–3) Charles Dickens portrayed the Court of Chancery as a grotesquely inefficient hindrance to the resolution of property disputes, while in Little Dorrit (1855–7) the target of his satire was the ‘Circumlocution Office’, a government department dedicated to obstructing economic progress. Joint-stock companies remained illegal until the 1720 Bubble Act was repealed in 1824, while debtors’ prisons like the Marshalsea – so vividly depicted in Little Dorrit – continued to operate until the passage of the 1869 Bankruptcy Act. It is also worth remembering that much of the legislation passed by Victorian parliaments in connection with the textile industry was designed to limit the economic freedom of factory-owners, notably with respect to child labour.

 

pages: 424 words: 140,262

Blood, Iron, and Gold: How the Railways Transformed the World by Christian Wolmar

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banking crisis, Beeching cuts, British Empire, Cape to Cairo, invention of the wheel, James Watt: steam engine, joint-stock company, Khartoum Gordon, Mahatma Gandhi, railway mania, refrigerator car, side project, South China Sea, transcontinental railway, tulip mania, urban sprawl

Just as in Germany and before that in Great Britain, once the railways had reached a critical mass and began to prove their worth, a railway mania developed with a rush to build lines. There had already been much speculation in railway shares as schemes began to be promoted in the early 1840s and there were several other waves of speculation, especially as the absence of clear legislation on joint-stock companies allowed all kinds of fraudulent practices to thrive. In Lombardy, the drive to build more railways was led by the Rothschild company, which obtained the concession to build two major railway systems: the completion of the main east–west artery from Trieste across to the Piedmont border beyond Milan, and the construction of the Central Italy line heading south from Piacenza to Bologna in the Papal States and Pistoia in Tuscany, a total of more than 650 miles.

Dalhousie’s ‘minute’ had expressed a vision for a railway that was both strategically important but also profitable, stating that once opened, these railways ‘will, as a commercial undertaking, offer a fair remunerative return on the money which has been expended in their construction’. 17 That was an ambitious aim which he realized would only be possible with initial state aid. Therefore, most Indian railways were built through an arrangement combining the public and private sectors. Conventional joint stock companies, based in the UK, would raise capital, mostly from British investors, to fund the construction but, to ensure that the money could be raised, the government of India guaranteed a healthy 5 per cent rate of return. This was essential as it took many years, sometimes decades, for the companies to achieve profitability and the government had to be the financial backstop to pick up the shortfall.

 

pages: 543 words: 147,357

Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society by Will Hutton

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Andrei Shleifer, asset-backed security, bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, capital controls, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, choice architecture, cloud computing, collective bargaining, conceptual framework, Corn Laws, corporate governance, credit crunch, Credit Default Swap, debt deflation, decarbonisation, Deng Xiaoping, discovery of DNA, discovery of the americas, discrete time, diversification, double helix, Edward Glaeser, financial deregulation, financial innovation, financial intermediation, first-past-the-post, floating exchange rates, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Akerlof, Gini coefficient, global supply chain, Growth in a Time of Debt, Hyman Minsky, I think there is a world market for maybe five computers, income inequality, inflation targeting, interest rate swap, invisible hand, Isaac Newton, James Dyson, James Watt: steam engine, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, Long Term Capital Management, Louis Pasteur, low-wage service sector, mandelbrot fractal, margin call, market fundamentalism, Martin Wolf, means of production, Mikhail Gorbachev, millennium bug, moral hazard, mortgage debt, new economy, Northern Rock, offshore financial centre, open economy, Plutocrats, plutocrats, price discrimination, private sector deleveraging, purchasing power parity, quantitative easing, race to the bottom, railway mania, random walk, rent-seeking, reserve currency, Richard Thaler, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, Rory Sutherland, shareholder value, short selling, Silicon Valley, Skype, South Sea Bubble, Steve Jobs, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, unpaid internship, value at risk, Washington Consensus, working poor, éminence grise

Then there is the three-masted sailing ship, which allowed large vessels to sail close to the wind, permitted the Portuguese and then their European imitators to sail around the world. Without this GPT, there would have been no circumnavigation of the globe; no discovery of the Americas, leading to new centres of power and productive capacity; no European colonisation; no long-distance sea trade; no rich European merchant class; no consequent financial innovations, such as joint stock companies and marine insurance, to deal with the risk and uncertainty of long voyages; and less possibility of the principles of magnetism being understood. Similarly, in the nineteenth century, the railway was much more than just a transport technology. It transformed companies, creating both mass consumption and mass production. It turned local, fragmented markets into powerful, national markets, and thereby enabled the United States to achieve previously unimaginable scale economies – with seismic ramifications for global industrial leadership.

The greatest scandal had occurred in 1720, when shares in a slave-trading monopoly – the South Sea Company – had departed far from economic reality. The result was the so-called South Sea Bubble. Even the Chancellor of the Exchequer speculated on it. Then the bubble popped. The losses and devastation were unprecedented. However, Parliament learned its lesson: in future it would be more circumspect to which joint stock companies it granted a monopoly – and whether they should have monopolies at all. After 1750, the pace of reform accelerated. The parliamentary system was relatively open, and the ‘Old Corruption’, for which the remedy was more and better parliament, was blamed for the traumatising loss of the thirteen American colonies. If Britain wanted to avoid such shattering defeats in future, best be more open still.

 

pages: 493 words: 145,326

Fire and Steam: A New History of the Railways in Britain by Christian Wolmar

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accounting loophole / creative accounting, Beeching cuts, carbon footprint, collective bargaining, computer age, Corn Laws, cross-subsidies, financial independence, hiring and firing, James Watt: steam engine, joint-stock company, railway mania, rising living standards, Silicon Valley, South Sea Bubble, strikebreaker, union organizing, upwardly mobile, working poor, yield management

With such well-heeled passengers, who would also use the railways for long-distance travel on business, the major train companies were doing their utmost to improve their services to meet the needs of this more prosperous, and consequently more demanding, market. They were spurred on by rivalry with each other, but despite their dominance their profitability waned as they struggled to pay for the improvements to their service. The London & North Western, for example, which for most of its thirty-year period under the chairmanship of Sir Richard Moon (who had replaced Mark Huish in 1861) had been the biggest joint stock company in the world, was now prepared to spend considerable sums to offer passengers what today would be known as a ‘more pleasant journey experience’. Moon had been a brilliant manager, developing the basic managerial concepts such as ‘executive responsibility’ first set out by Huish, but his very ethos – of providing the best possible service at minimum cost – meant that the company’s facilities were rather parsimonious.

., ref1 gramophone records, ref1 Grand Junction Railway, ref1, ref2, ref3, ref4, ref5, ref6, ref7; amalgamation, ref8, ref9 Grangemouth, ref1, ref2 Granite City, ref1 Grantham, ref1; accident, ref2 Granville Express, ref1 Gravesend, ref1 Gravesend & Rochester Railway, ref1 Gray, Thomas, ref1, ref2 Grayling, Chris, ref1 Great Central Railway, ref1, ref2, ref3, ref4; creation of, ref5; and cooperation, ref6; publicity, ref7; fish services, ref8; and wartime, ref9, ref10; closure, ref11 Great Eastern Railway, ref1, ref2, ref3, ref4, ref5, ref6, ref7; maps, ref8; and amalgamation, ref9, ref10; wine list, ref11 Great Exhibition, ref1, ref2 Great Heck accident, ref1 Great North of Scotland Railway, ref1 Great North Road, ref1 Great Northern Advertiser, ref1 Great Northern Cemetery, ref1 Great Northern Railway, ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8; route to Scotland and railway races, ref9, ref10, ref11; costs, ref12; track length, ref13; topography, ref14; enters price war, ref15; and Midland Railway, ref16, ref17; introduces third class, ref18; locomotive confiscated, ref19; begins selling coal, ref20; and amalgamation, ref21, ref22 Great Western Magazine, ref1 Great Western Railway, ref1, ref2, ref3, ref4, ref5, ref6; gauge, ref7, ref8, ref9; costs, ref10; speeds, ref11; and parliamentary trains, ref12; and royal travel, ref13; freight services, ref14; track length, ref15; time system, ref16; expansion, ref17; consolidation, ref18, ref19, ref20; and Welsh lines, ref21; and Irish services, ref22; treatment of poorer passengers, ref23; offers hunters’ tickets, ref24; financial difficulties, ref25; accidents, ref26, ref27; telegraph system, ref28; wages and bonuses, ref29, ref30; industrial relations, ref31, ref32, ref33; provident society, ref34; working hours, ref35; first corridor train, ref36; and railway races, ref37, ref38; modernization and improvements, ref39, ref40; and cooperation, ref41; publicity, ref42, ref43, ref44, ref45; loss-making services, ref46; and Helston line, ref47; compensation claim, ref48; and amalgamation, ref49, ref50, ref51; profitability, ref52, ref53, ref54; introduces warning system, ref55; livery, ref56, ref57; service improvements, ref58; hundredth anniversary, ref59; and wartime, ref60, ref61; workshops, ref62; and diesels, ref63 Greeks, ancient, ref1 Green, Chris, ref1 Greenwich, ref1 Greenwich Mean Time, ref1 Gresley, Nigel, ref1, ref2 Gretna Junction, ref1 Grey, Earl, ref1 Grimsby, ref1, ref2 ‘Grouse Traffic’, ref1 Guildford, ref1 Gunnislake, ref1 hackney cabs, ref1 Hackworth, Timothy, ref1, ref2, ref3 Halifax, ref1 Hall, Stanley, ref1 Hampshire, ref1 Hampton Court, ref1 Hardy, Thomas, ref1 Harford, Edward, ref1 Harrow, ref1; accident, ref2 Hartlepool, ref1 Harwich, ref1, ref2 Hastings, ref1, ref2, ref3 Hatfield, ref1; accident, ref2, ref3 Heath, Edward, ref1, ref2 Heathrow Express, ref1 Hedley, William, ref1 Helmsdale, ref1 Helston, ref1 Henry, Thomas, ref1 Henshaw, David, ref1, ref2, ref3 Herapath, John, ref1 Hereford, ref1, ref2 Hertfordshire, ref1, ref2, ref3, ref4 Hetton Colliery, ref1 Hewitt, John, ref1 High Speed One, ref1, ref2 High Speed Train (HST), ref1, ref2, ref3 High Street Kensington station, ref1 High Wycombe, ref1 Highbridge, ref1 Highland Railway, ref1; wartime service, ref2, ref3 Highlands, ref1, ref2, ref3, ref4, ref5 Hill, Rowland, ref1 Hitchin, ref1 Holborn Viaduct station, ref1 Holden, Michael, ref1 Holiday Haunts, ref1 holiday trains, ref1, ref2, ref3, ref4, ref5 Holland, ref1, ref2 Holyhead, ref1, ref2 hooliganism, ref1 Hopton incline, ref1 Hornsey, ref1 horses, ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8; on Swansea & Mumbles Railway, ref9; and railway gauge, ref10; and Stockton & Darlington Railway, ref11; and Liverpool & Manchester Railway, ref12, ref13; bolting, ref14, ref15; and trams, ref16; and railway amalgamation, ref17; under BR, ref18, ref19 hotels, ref1, ref2, ref3, ref4 Hounslow, ref1 Household Words, ref1 housing, ref1, ref2, ref3, ref4, ref5 Howson, Martha, ref1 Huddersfield, ref1 Hudson, George, ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8 Hughes, Henry, ref1 Huish, Captain Mark, ref1, ref2, ref3 Hull, ref1, ref2, ref3, ref4, ref5; Royal Station Hotel, ref6; Paragon station, ref7, ref8 Hull & Barnsley Railway, ref1, ref2 Hull Trains, ref1 Hundred of Manhood & Selsey Tramway, ref1 Hunterston, ref1 Huskisson, William, ref1, ref2, ref3, ref4 Hyde Park, ref1 Immingham, ref1 Imperial Airways, ref1 India, ref1, ref2, ref3 Ingleton, ref1 innkeepers, ref1 InterCity, ref1, ref2, ref3, ref4, ref5 InterCity ref1 trains, ref2 interlocking, ref1, ref2 International Exhibition, ref1, ref2 Invergarry & Fort Augustus branch line, ref1 Invergordon, ref1 Inverness, ref1, ref2, ref3, ref4, ref5 Ireland, ref1, ref2, ref3, ref4, ref5, ref6; first railways, ref7, ref8, ref9; potato famine, ref10, ref11; steamer services, ref12; railway network, ref13; railway gauge, ref14 Irish Mail, ref1, ref2, ref3 Irish Sea, ref1 Iron Times, ref1 Irwell, river, ref1, ref2 Isle of Wight, ref1, ref2 Italy, ref1 James, William, ref1, ref2, ref3, ref4 Japan, ref1, ref2, ref3; bullet trains, ref4 Jellicoe Specials, ref1, ref2, ref3 Jessop, William, ref1, ref2 John O’Groats, ref1 joint stock companies, ref1 junctions, ref1, ref2, ref3, ref4; flat, ref5 Kelly, Phil, ref1 Kelvedon & Tollesbury Light Railway, ref1 Kemble, Fanny, ref1 Kent, ref1, ref2, ref3, ref4, ref5, ref6; and wartime, ref7, ref8, ref9, ref10 Kent & East Sussex Railway, ref1 Kentish Town accident, ref1, ref2 Kenyon & Leigh Railway, ref1 Kete, John, ref1 Kew, ref1 Killingworth Colliery, ref1 Kilsby tunnel, ref1, ref2 King’s Cross station, ref1, ref2, ref3, ref4, ref5, ref6, ref7; Cambridge trains, ref8; access to, ref9; Great Northern Hotel, ref10, ref11; elegance, ref12, ref13; serves commuter lines, ref14; cemetery services, ref15; and railway races, ref16; and ‘Beer Trains’, ref17; smells, ref18; LNER services, ref19, ref20 Kinnaber Junction, ref1 Kitchener, Lord, ref1 Labour Party, ref1, ref2, ref3, ref4, ref5, ref6, ref7; and rail privatization, ref8, ref9, ref10, ref11 Ladbroke Grove accident, ref1, ref2 Laing, Samuel, ref1 laissez-faire, ref1, ref2, ref3, ref4, ref5 Lake District, ref1 lamps, ref1 Lancashire, ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8 Lancashire & Yorkshire Railway, ref1, ref2, ref3, ref4, ref5, ref6 Lancaster, ref1 Land’s End, ref1 landowners, ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8, ref9 Launceston, ref1 Lawson, Nigel, ref1 Lecount, Peter, ref1 Lee Navigation, ref1 Leeds, ref1, ref2; cotton industry, ref3; London services, ref4, ref5, ref6, ref7, ref8, ref9; excursions, ref10; investors, ref11; railway access, ref12; station refurbishment, ref13; and electrification, ref14 Leeds & Selby Railway, ref1 Leeds Institute, ref1 Leicester, ref1, ref2, ref3, ref4, ref5, ref6, ref7 Leigh & Bolton Railway, ref1 Letchworth Garden City, ref1 level crossings, ref1, ref2; keepers, ref3, ref4 Lewisham, ref1, ref2; accident, ref3 light railways, ref1 Light Railways Act, ref1, ref2 Lightfoot brothers, ref1 Lincoln, ref1 Lincolnshire, ref1, ref2, ref3, ref4, ref5, ref6 liners, ref1, ref2, ref3 liveries, ref1, ref2, ref3 Liverpool, ref1, ref2; and building of Liverpool & Manchester Railway, ref3, ref4, ref5, ref6; population, ref7; ban on locomotives, ref8, ref9; tunnel approach, ref10; cable-operated approach, ref11, ref12; and opening of Liverpool & Manchester Railway, ref13; railway connections, ref14, ref15, ref16, ref17, ref18; and horse-races, ref19, ref20; and postal service, ref21; suburban railways, ref22; workmen’s trains, ref23; viaduct bombed, ref24; and electrification, ref25 Liverpool & Manchester Railway, ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8, ref9, ref10; double track, ref11, ref12, ref13, ref14; surveys, ref15, ref16; costs, ref17, ref18; dividends and profits, ref19, ref20, ref21; gauge, ref22, ref23; choice of steam power and Rainhill trials, ref24; cable-operated section, ref25, ref26; opening, ref27, ref28, ref29; passenger services, ref30; tickets and fares, ref31; carriages, ref32; omnibus connections, ref33; goods services, ref34; mail services, ref35, ref36; track length, ref37, ref38, ref39; excursions, ref40; military transportation, ref41; amalgamation, ref42; telegraph system, ref43; working conditions, ref44; industrial relations, ref45 Liverpool Courier, ref1 Liverpool Mercury, ref1, ref2 Liverpool Overhead Railway, ref1 Liverpool Street station, ref1, ref2, ref3, ref4; Cambridge trains, ref5; building and cost, ref6, ref7; and electrification, ref8; collaboration with private sector, ref9; and Crossrail scheme, ref10 Liverpool Times, ref1 Llanelli, ref1 Llangynog-Llanrhaeadrym-Mochnant branch line, ref1 Lloyd George, David, ref1, ref2 Locke, Joseph, ref1, ref2, ref3, ref4; and Grand Junction Railway, ref5, ref6 Locomotion, ref1 Locomotion No. ref1, ref2 Locomotive Act (Red Flag Act), ref1 Locomotive Exchanges, ref1 locomotives: Duchess class, ref1; coal-burning, ref2; Crampton, ref3; captured by other companies, ref4; builders, ref5; care of, ref6; speed records, ref7, ref8; impact of war, ref9, ref10, ref11; Royal Scots class, ref12; Star and Saint classes, ref13; King and Castle classes, ref14, ref15; Southern, ref16; streamlining, ref17; Pacific class, ref18; investment in, ref19; post-war, ref20; private, ref21; diesel, ref22, ref23, ref24, ref25; survival of steam, ref26, ref27, ref28; electric, ref29, ref30, ref31; Deltic diesels, ref32 London: first railway, ref1; first railway connections, ref2, ref3, ref4; suburbs, ref5, ref6, ref7; termini, ref8, ref9, ref10, ref11, ref12, ref13; growth in railway connections, ref14, ref15, ref16, ref17, ref18, ref19, ref20; suburban and commuter railways, ref21, ref22, ref23, ref24, ref25, ref26, ref27, ref28, ref29, ref30, ref31, ref32, ref33; and postal service, ref34; time in, ref35; exhibition traffic, ref36, ref37, ref38; Midland Railway gains access, ref39; impact of railways, ref40, ref41; workmen’s trains, ref42; population growth, ref43; railway accidents, ref44; and Great Central connections, ref45; tramways, ref46; and wartime, ref47, ref48, ref49, ref50, ref51; and amalgamation, ref52, ref53; integrated transport system, ref54, ref55; wartime evacuation, ref56; and electrification, ref57 London & Birmingham Railway, ref1, ref2, ref3, ref4, ref5, ref6; surveys, ref7; stagecoach connections, ref8; fares, ref9; investors, ref10; and royal travel, ref11; freight services, ref12; amalgamation, ref13, ref14; departure times, ref15; railway cottages, ref16 London & Chatham Railway, ref1, ref2 London & Croydon Railway, ref1 London & Greenwich Railway, ref1; right-hand running, ref2 London & North Eastern Railway (LNER), ref1, ref2, ref3; network, ref4; hotels, ref5; livery, ref6, ref7; accidents, ref8; rugby specials, ref9; food and drink, ref10; service improvements, ref11; publicity, ref12, ref13; profitability, ref14, ref15; split at nationalization, ref16; electrification, ref17 London & North Western Railway (LNWR), ref1, ref2, ref3, ref4, ref5, ref6, ref7; dominant position, ref8; value and profitability, ref9; enters price war, ref10; and Midland Railway, ref11; and Welsh lines, ref12; and Irish services, ref13; sells coal, ref14; working hours, ref15; and route to Scotland, ref16; and railway races, ref17; braking system, ref18; Preston accident, ref19; modernization and improvements, ref20; Sunny South Special service, ref21; electrification, ref22; publicity, ref23; compensation claim, ref24; and amalgamation, ref25, ref26; livery, ref27 London & South Western Railway, ref1, ref2, ref3, ref4; and railway races, ref5, ref6; reputation, ref7; electrification, ref8, ref9; consolidation, ref10; wartime service, ref11; and amalgamation, ref12, ref13 London & Southampton Railway, ref1 London Bridge station, ref1, ref2, ref3, ref4 London, Brighton & South Coast Railway, ref1, ref2, ref3, ref4; collapse, ref5; Clayton tunnel accident, ref6; strike, ref7; Southern Belle service, ref8; electrification, ref9, ref10; and amalgamation, ref11, ref12 London, Chatham & Dover Railway, ref1, ref2, ref3 London Electric Railway, ref1, ref2 London, Midland & Scottish Railway (LMS), ref1, ref2, ref3, ref4, ref5; network and inventory, ref6; livery, ref7; service improvements, ref8, ref9; publicity, ref10; workforce and repair facilities, ref11; profitability, ref12, ref13; and wartime, ref14, ref15 London Midland Region, ref1, ref2 London Necropolis Railway, ref1 London Passenger Transport Board, see London Transport London Post Office, ref1 London, Tilbury & Southend Railway, ref1 London Transport, ref1, ref2, ref3, ref4; headquarters, ref5 London Underground, ref1, ref2, ref3, ref4, ref5, ref6; Metropolitan Line, ref7, ref8; District Line, ref9, ref10; Circle Line, ref11, ref12; impact on shopping habits, ref13; and electrification, ref14; public relations, ref15; and wartime, ref16, ref17, ref18, ref19, ref20; women on, ref21; Bakerloo Line, ref22; Piccadilly Line, ref23; increase in passengers, ref24; overcrowding, ref25; rails, ref26; see also Metropolitan District Railway; Metropolitan Railway London–York Direct Railway, ref1 Londonderry, ref1 looms, steam-powered, ref1 Lord’s cricket ground, ref1 lorries, ref1, ref2, ref3, ref4, ref5, ref6, ref7 Lossiemouth, ref1 Loughborough, ref1 Louis Philippe, King, ref1 Louis XIV, ref1 Ludgate Hill station, ref1 Luton, ref1 Lutterworth, ref1 Macadam, John, ref1, ref2 Macclesfield, ref1 MacDonald, Ramsay, ref1 McGrath, Thomas, ref1 MacGregor, John, ref1, ref2 Macmillan, Harold, ref1 Maglev trains, ref1 Maiden Lane station, ref1 Maidenhead, ref1 Maidenhead Bridge, ref1 Maidstone, ref1 mail order goods, ref1 mail services, ref1, ref2, ref3, ref4, ref5, ref6 Major, John, ref1, ref2, ref3 Mallaig, ref1 Mallard, ref1 Manchester, ref1, ref2, ref3, ref4, ref5, ref6; steam-powered looms, ref7; and building of Liverpool & Manchester Railway, ref8, ref9; population, ref10; indifference to railway, ref11; weavers, ref12; railway connections, ref13, ref14, ref15, ref16, ref17, ref18, ref19, ref20, ref21, ref22; investment in railways, ref23; and excursions, ref24, ref25; railway access, ref26; workmen’s trains, ref27; and railway races, ref28; Great Central connections, ref29, ref30; and electrification, ref31 Manchester & Birmingham Railway, ref1 Manchester & Leeds Railway, ref1, ref2 Manchester & Sheffield Railway, ref1 Manchester, Sheffield & Lincolnshire Railway, ref1, ref2, ref3, ref4, ref5 Marlborough, ref1 Marly, gardens of, ref1 Marples, Ernest, ref1, ref2, ref3 Marsh, Richard, ref1, ref2 marshalling yards, ref1, ref2 Marylebone Cricket Club, ref1 Marylebone station, ref1, ref2, ref3, ref4, ref5 Mayhew, Henry, ref1 Meakin, George, ref1 Mechanics’ Institutes, ref1 Mendips, ref1 Merchant Navy, ref1 Mercury, ref1 Merstham, ref1 Merthyr Tydfil, ref1 Metroland, ref1 Metropolitan District Railway, ref1, ref2, ref3, ref4 Metropolitan Railway, ref1, ref2, ref3, ref4, ref5, ref6; introduces Pullman service, ref7; profitability, ref8; and Great Central Railway, ref9; and amalgamation, ref10 middle classes, ref1, ref2, ref3, ref4, ref5, ref6, ref7 Middlesbrough, ref1, ref2, ref3, ref4 Middlesex, ref1, ref2, ref3 Middleton Colliery, ref1 Mid-Kent Railway, ref1 Midland Counties Railway, ref1, ref2 Midland Railway, ref1, ref2, ref3, ref4, ref5, ref6; enters price war, ref7; access to London, ref8; promotes third class, ref9, ref10; and Irish services, ref11; Pullman service, ref12; industrial relations, ref13; and Settle & Carlisle line, ref14, ref15, ref16; braking system, ref17; coal trains, ref18; and wartime, ref19, ref20; and amalgamation, ref21, ref22, ref23, ref24 Milford Haven, ref1 military trains, ref1, ref2, ref3, ref4, ref5 milk, ref1, ref2, ref3, ref4 Milne, Sir James, ref1 Milton Keynes, ref1 mines, ref1, ref2, ref3, ref4, ref5, ref6 Molesworth, Sir William, ref1 Monmouthshire, ref1 Monmouthshire Railway and Canal Company, ref1 monopolies, ref1; Huish and, ref2, ref3; Victorian fear of, ref4, ref5; privatization and, ref6 monorails, ref1, ref2 ‘monster trains’, ref1 Moon, Sir Richard, ref1, ref2 Morecambe Bay, ref1 Moretonhampstead, ref1 Moreton-in-the-Marsh, ref1 Morning Post, ref1 Morrison, Herbert, ref1 Morton, Sir Alastair, ref1 Motherwell, ref1 motorways, ref1, ref2, ref3, ref4, ref5 Mumbles, ref1 munitions trains, ref1, ref2, ref3 Myers Flat swamp, ref1, ref2 Napoleon Bonaparte, ref1 narrow gauge railways, ref1, ref2, ref3 National Rail Enquiry Service, ref1, ref2 National Union of Railwaymen (NUR), ref1, ref2, ref3, ref4, ref5, ref6 National Wages Board, ref1 nationalization, ref1, ref2, ref3, ref4, ref5, ref6; opposition to, ref7, ref8, ref9; and amalgamation, ref10, ref11, ref12; and industrial relations, ref13 navvies, ref1, ref2, ref3, ref4; deaths of, ref5, ref6, ref7; shipped to Crimea, ref8 Nesham’s Colliery, ref1 Network Rail, ref1, ref2, ref3, ref4 Network SouthEast, ref1, ref2, ref3 New Southgate, ref1 New Zealand, ref1 Newbury, ref1, ref2 Newcastle, ref1, ref2, ref3, ref4; London services, ref5, ref6, ref7, ref8, ref9, ref10; Tyne bridges, ref11; wartime evacuation, ref12 Newcastle & Carlisle Railway, ref1, ref2, ref3, ref4; freight services, ref5 Newcastle & Darlington Railway, ref1 Newcastle Courant, ref1 ‘Newcastle Roads’, ref1 Newcomen, John, ref1 Newington Green, ref1 Newport, ref1 newspaper specials, ref1 newspapers (press), ref1, ref2, ref3, ref4; and railway advertising, ref5, ref6; and railway races, ref7; and rail strike, ref8; Southern Railway campaign, ref9; opposition to nationalization, ref10; switch to road haulage, ref11; opposition to privatization, ref12 Newton, ref1, ref2 Newton Abbot, ref1, ref2 Newtown, ref1 night traffic, ref1 Nightall, Jim, ref1 Nock, O.

 

pages: 442 words: 39,064

Why Stock Markets Crash: Critical Events in Complex Financial Systems by Didier Sornette

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Asian financial crisis, asset allocation, Berlin Wall, Bretton Woods, Brownian motion, capital asset pricing model, capital controls, continuous double auction, currency peg, Deng Xiaoping, discrete time, diversified portfolio, Elliott wave, Erdős number, experimental economics, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, global village, implied volatility, index fund, invisible hand, John von Neumann, joint-stock company, law of one price, Louis Bachelier, mandelbrot fractal, margin call, market bubble, market clearing, market design, market fundamentalism, mental accounting, moral hazard, Network effects, new economy, oil shock, open economy, pattern recognition, Paul Erdős, quantitative trading / quantitative finance, random walk, risk/return, Ronald Reagan, Schrödinger's Cat, short selling, Silicon Valley, South Sea Bubble, statistical model, stochastic process, Tacoma Narrows Bridge, technological singularity, The Coming Technological Singularity, The Wealth of Nations by Adam Smith, Tobin tax, total factor productivity, transaction costs, tulip mania, VA Linux, Y2K, yield curve

The South Sea bubble is a fascinating story of mass hysteria, political corruption, and public upheaval. (See Figure 1.2.) It is really a collection of thousands of stories, tracing the personal fortunes of countless individuals who rode the wave of stock speculation for a furious six months in 1720. The “bubble year,” as it is called, actually 10 chapter 1 involves several individual bubbles, as all kinds of fraudulent joint-stock companies sought to take advantage of the mania for speculation. The following account borrows from “The Bubble Project” [60]. In 1711, the South Sea Company was given a monopoly of all trade to the South Sea ports. The real prize was the anticipated trade that would open up with the rich Spanish colonies in South America. In return for this monopoly, the South Sea Company would assume a portion of the national debt that England had incurred during the War of the Spanish Succession.

Crowds of people beset his door, and when he shut up at three o’clock, he found that no less than one thousand shares had been subscribed for, and the deposits paid. He was thus, in five hours, the winner of £2,000. He was philosophical enough to be contented with his venture, and set off the same evening for the Continent. He was never heard of again. Such scams were bad for the speculation business and so, largely through the pressure of the South Sea directors, the so-called “Bubble Act” was passed on June 11, 1720 requiring all joint-stock companies to have a royal charter. For a moment, the confidence of the people was given an extra boost, and they responded accordingly. South Sea stock had been at £175 at the end of February, 380 at the end of March, and around 520 by May 29. It peaked at the end of June at over £1,000 (a psychological barrier in that four-digit number). With credulity now stretched to the limit and rumors of more and more people (including the directors themselves) selling off, the bubble then burst according to a slow but steady deflation (not unlike the 60% drop of the Japanese Nikkei index after its all-time peak at the end of December 1989).

 

pages: 369 words: 121,161

Alistair Cooke's America by Alistair Cooke

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Albert Einstein, Alistair Cooke, British Empire, double entry bookkeeping, full employment, Hernando de Soto, imperial preference, interchangeable parts, joint-stock company, Maui Hawaii, Ralph Nader, Ralph Waldo Emerson, Spread Networks laid a new fibre optics cable between New York and Chicago, strikebreaker, The Wealth of Nations by Adam Smith, transcontinental railway, Triangle Shirtwaist Factory, urban sprawl, wage slave, Works Progress Administration

But life was bleak for the common man, and he must have been greatly taken with these hints of a country with no recruiting sergeants and bailiffs, no spies, magistrates, tithe gatherers, or other such badgering types. The men of substance who financed the colonies were not bemused by such fictions, but they saw the prospect of a breathtaking investment in a country that, unlike their own, had unbounded virgin land. Since all newly discovered lands belonged automatically to the Crown, the men who warmed to this enterprise had first to procure from James I a charter as a trading company. This was a joint-stock company, for individuals had learned to their cost in many lone trade ventures in Europe and the East that a private purse carried no authority abroad and was ‘cold comfort to adventures.’ So the men who jointly raised the money were such as Sir John Popham, a lord chief justice; Sir Thomas Smith, director of the East India Company; and Sir Ferdinando Gorges, governor of the fort at Plymouth. They were out to finance what they hoped would be profitable plantations in Virginia, guaranteed by the authority of the state.

As it happened, the forty-niners struck a remarkably docile period in the history of the Indian wars, and the Indians in the main appeared to act as guides, often to proffer mules and food and in other ways assist the survival of the white man. But the standby military organization was a godsend in other ways, providing as it did a roster for the daily chores and a firm discipline when hunger and exhaustion transformed family encampments into bear pits. Many seagoing Yankees formed joint stock companies before they left, and later improvised written constitutions for their mutual protection. The most famous and successful example of self-government was the Charlestown Company, formed in the East, which subscribed its equipment and expenses, formed a committee to study the metallurgy of mining, and drew up a remarkably farsighted constitution that held them unscathed through sore trials, provided for the pooling of such gold as they might dig, and an equal, audited distribution when the company returned East.

 

pages: 497 words: 153,755

The Power of Gold: The History of an Obsession by Peter L. Bernstein

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Albert Einstein, Atahualpa, Bretton Woods, British Empire, California gold rush, central bank independence, double entry bookkeeping, Edward Glaeser, falling living standards, financial innovation, floating exchange rates, Francisco Pizarro, German hyperinflation, Hernando de Soto, Isaac Newton, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, large denomination, liquidity trap, money: store of value / unit of account / medium of exchange, price stability, profit motive, random walk, rising living standards, Ronald Reagan, seigniorage, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, trade route

The result of the shortfall was the establishment of the Bank of England, an unusual deal between the government and the men of "quality" who were shareholders of the Bank (that uppercase letter B for ever after identified that bank as the Bank). Under this arrangement, the Bank would lend the government f 1.2 million at the moderate interest rate of 8 percent, in return for which the institution would be established as the first private company to do business as a limited-liability corporation, or so-called joint stock company-in the rapidly growing field of banking just like the institutions of our own time.'" The founding of the Bank would turn out to be a momentous step in the history of Britain, as the institution over time would steadily increase its influence-even its power-over the banking system and the general economy, the gold stock, and Britain's financial relations with the rest of the world. In later years, the Bank came to be known familiarly as the Old Lady of Threadneedle Street, an expression whose meaning varied from a friendly nickname to a bitter expression of disdain, depending upon the circumstances.

*During the go-go days of the 1960s, some of the dubious debt issued by highly leveraged conglomerates was referred to facetiously as "Chinese paper." *The English Commonwealth was the government headed by Oliver Cromwell that assumed the rule of Britain after Charles I was beheaded at Whitehall on January 30, 1649. The monarchy, under Charles's son Charles II, was restored in 1660. *The Dutch East India Company, founded in 1602, was the first permanent joint stock company. Commercial banking firms with limited liability developed much more rapidly in the United States than in Britain during the first half of the nineteenth century. tSee Bernstein (1996), Chapter 5, for an extended discussion of English economic and financial development in the 1600s, including the establishment of Lloyd's insurance. *The discussion that follows is necessarily compressed.

 

pages: 1,205 words: 308,891

Bourgeois Dignity: Why Economics Can't Explain the Modern World by Deirdre N. McCloskey

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Admiral Zheng, agricultural Revolution, Albert Einstein, BRICs, British Empire, butterfly effect, Carmen Reinhart, clockwork universe, computer age, Corn Laws, dark matter, David Ricardo: comparative advantage, Donald Trump, Edward Lorenz: Chaos theory, European colonialism, experimental economics, financial innovation, Fractional reserve banking, full employment, George Akerlof, germ theory of disease, Gini coefficient, greed is good, Howard Zinn, income per capita, interchangeable parts, invention of agriculture, invention of air conditioning, invention of writing, invisible hand, Isaac Newton, James Watt: steam engine, John Maynard Keynes: technological unemployment, John Snow's cholera map, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, means of production, Naomi Klein, New Economic Geography, New Urbanism, purchasing power parity, rent-seeking, road to serfdom, Robert Gordon, Ronald Coase, Ronald Reagan, Scientific racism, Scramble for Africa, Shenzhen was a fishing village, Simon Kuznets, Slavoj Žižek, spinning jenny, Steven Pinker, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, tulip mania, union organizing, Upton Sinclair, urban renewal, V2 rocket, very high income, working poor, World Values Survey, Yogi Berra

Most of the legal changes after 1815 occurred by way of statute, overcoming a common law romanticized in the Northian story, with more economic effect than all the Georgian enclosure bills and other strictly economic results of 1688 taken together. And on a still wider view of what the professor of law Simon Deakin calls “the legal origin hypothesis” of North and his followers, one can see little evidence that the long history of English common law was causal for the Industrial Revolution. In the matters of employment contracts and joint stock companies, Deakin writes, “industrialization preceded legal change in Britain, whereas this relationship was reversed in France and Germany,” merely because British law was imitated (he speaks of “sharing of legal ideas,” another example of lateral transfer of cultural genes). And then after a lag the result of Continental civil law 287 were imitated in common-law regimes in the British Empire. Laws converged.

“Did People in the Eighteenth Century Really Work Harder, and, If So, Why?” Paper presented to the Midwest Economics Association, Chicago, March. de Vries, Jan. 2008b. The Industrious Revolution: Consumer Behavior and the Household Economy, 1650 to the Present.Cambridge: Cambridge University Press. Deakin, Simon. 2008. “Legal Origin, Juridical Form and Industrialization in Historical Perspective: The Case of the Employment Contract and the Joint-Stock Company.” Centre for Business Research, University of Cambridge. Working Paper No. 369. Deane, Phyllis., and W. A. Cole. 1962. British Economic Growth, 1688 1959. Cambridge: Cambridge University Press. DeLong, Bradford. 2007. “Barry Ritholtz Does Not Seem to Understand the Purpose of ‘Core Inflation’.” At DeLong blog, Grasping Reality with Both Hands, http://delong.typepad.com/sdj/2007/09/barry-ritholtz-.html Demsetz, Harold. 1967.

 

The Great Turning: From Empire to Earth Community by David C. Korten

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Albert Einstein, banks create money, big-box store, Bretton Woods, British Empire, clean water, colonial rule, Community Supported Agriculture, death of newspapers, declining real wages, European colonialism, Francisco Pizarro, full employment, George Gilder, global supply chain, global village, Hernando de Soto, Howard Zinn, informal economy, invisible hand, joint-stock company, land reform, market bubble, market fundamentalism, Monroe Doctrine, Naomi Klein, neoliberal agenda, new economy, peak oil, planetary scale, Plutocrats, plutocrats, Ronald Reagan, Rosa Parks, South Sea Bubble, stem cell, structural adjustment programs, The Chicago School, trade route, Washington Consensus, World Values Survey

Armed skirmishes with the rival North West Company were common until the British government forced their merger in 1821 into a single company with a monopoly over the fur trade in much of North America, including the Northwest Territories. The British South Sea Company, which was chartered primarily to sell African slaves to Spanish colonies in America, became the centerpiece of the “South Sea Bubble,” one of history’s most famous financial scams.13 The new corporate form, the joint stock company created to fulfill the above functions, combined two ideas from the Middle Ages: the sale of shares in public markets and the protection of owners from personal liability for the corporation’s obligations. These two features made it possible to amass virtually unlimited financial capital within a single firm, assured the continuity of the firm beyond the death of its founders, and absolved owners of personal liability for the firm’s losses or misdeeds beyond the amount of their holdings in the company.

PLUTOCRACY Foreshadowing the corporate rule of our own day, the colonial settlements were created more as economic than political jurisdictions — essentially company estates established by corporate charters issued by the Crown to be managed for the profit of their owners. Beginning in 1584, with the permission of Elizabeth I, Walter Raleigh made several unsuccessful attempts to establish the first English colony in America as a private investment on Roanoke Island off the North Carolina coast.1 Private entrepreneurs and joint stock companies established a dozen permanent English colonies on other sites along the coast of America during the reigns of James I (1603–25) and Charles I (1625–49). The technology of the time limited communication to letters or word of mouth via small sailing ships, which meant that administration and finance were necessarily in the hands of the individuals who held the charters, with virtually no governmental oversight.

 

pages: 136 words: 42,864

The Cable by Gillian Cookson

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British Empire, cable laying ship, joint-stock company, Monroe Doctrine

The idea was that a British company would attract a wider pool of investors, and deal more effectively with governments and cable-makers. The focus of the enterprise thus shifted decisively to London. The new company received an enthusiastic endorsement from The Times, whose leader writer had the utmost faith both in the directors and in the engineers involved: It is not our custom to come forward as the advocates of joint-stock companies, but surely this project constitutes an exception. The interests of this nation and of the civilised world are so closely bound up with its success that we feel justified in recommending it to the notice of our readers. It seemed to The Times that the scheme could not fail: ‘The enterprise must be badly carried out indeed if the revenue … is not sufficient to pay a handsome interest upon the outlay.’

 

Profit Over People: Neoliberalism and Global Order by Noam Chomsky

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Bernie Sanders, Bretton Woods, declining real wages, deindustrialization, full employment, invisible hand, joint-stock company, land reform, manufacturing employment, means of production, Monroe Doctrine, Ronald Reagan, strikebreaker, structural adjustment programs, Telecommunications Act of 1996, The Wealth of Nations by Adam Smith, Thomas Malthus, union organizing, Washington Consensus

Rather than “corporate rights agreements,” these measures might be termed, more accurately, “corporate power agreements,” since it is hardly clear why such institutions should have any rights at all. When the corporatization of the state capitalist societies took place a century ago, in part in reaction to massive market failures, conservatives—a breed that now scarcely exists—objected to this attack on the fundamental principles of classical liberalism. And rightly so. One may recall Adam Smith’s critique of the “joint stock companies” of his day, particularly if management is granted a degree of independence; and his attitude toward the inherent corruption of private power, probably a “conspiracy against the public” when businessmen meet for lunch, in his acid view, let alone when they form collectivist legal entities and alliances among them, with extraordinary rights granted, backed, and enhanced by state power. With these provisos in mind, let us recall some of the intended features of the MAI, relying on what information has reached the concerned public, thanks to the “unholy alliance.”

 

pages: 306 words: 78,893

After the New Economy: The Binge . . . And the Hangover That Won't Go Away by Doug Henwood

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accounting loophole / creative accounting, affirmative action, Asian financial crisis, barriers to entry, borderless world, Branko Milanovic, Bretton Woods, capital controls, corporate governance, correlation coefficient, credit crunch, deindustrialization, dematerialisation, deskilling, ending welfare as we know it, feminist movement, full employment, gender pay gap, George Gilder, glass ceiling, Gordon Gekko, greed is good, half of the world's population has never made a phone call, income inequality, indoor plumbing, Internet Archive, job satisfaction, joint-stock company, Kevin Kelly, labor-force participation, liquidationism / Banker’s doctrine / the Treasury view, manufacturing employment, means of production, minimum wage unemployment, Naomi Klein, new economy, occupational segregation, pets.com, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, statistical model, structural adjustment programs, Telecommunications Act of 1996, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, total factor productivity, union organizing, War on Poverty, women in the workforce, working poor, Y2K

This was 1999, and millennial feeHng was thick in the air. To Burbach and Robinson, the present is capitaHsm's fourth era. First was mercantiHsm and the early stages of European colonization—^primi- tive accumulation. Then came the era of industrial capitalism, with the development of the big bourgeoisie and the nation-state. Then came corporate or monopoly capitalism—the emergence of the joint-stock company as the dominant form. And now we have globalized capitalism, born in the early 1970s. Epochs aren't what they used to be; unUke humans, they seem to have shortening Ufespans.They date their first epoch, Marx's "rosy dawn of the era of capitaHst production," from 1492 to 1789, 357 years. The second, the day of the industrial capitalist, from 1789 to 1900, 111 years. The third, the corporate era, lived about seventy years from 1900 to the early 1970s.

 

pages: 183 words: 17,571

Broken Markets: A User's Guide to the Post-Finance Economy by Kevin Mellyn

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banking crisis, banks create money, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, bonus culture, Bretton Woods, BRICs, British Empire, call centre, Carmen Reinhart, central bank independence, centre right, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, disintermediation, eurozone crisis, fiat currency, financial innovation, financial repression, floating exchange rates, Fractional reserve banking, global reserve currency, global supply chain, Home mortgage interest deduction, index fund, joint-stock company, Joseph Schumpeter, labor-force participation, labour market flexibility, liquidity trap, London Interbank Offered Rate, lump of labour, market bubble, market clearing, Martin Wolf, means of production, mobile money, moral hazard, mortgage debt, mortgage tax deduction, Ponzi scheme, profit motive, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, rising living standards, Ronald Coase, seigniorage, shareholder value, Silicon Valley, statistical model, Steve Jobs, The Great Moderation, the payments system, Tobin tax, too big to fail, transaction costs, underbanked, Works Progress Administration, yield curve, Yogi Berra

The direction of credit and investment linked to industrial policy (and social policy) is simply how choices get made. Subsidized green energy is but an extreme example, since the Eisenhower national highway system, subsidies for home ownership, and student loans are all examples of using the financial system for essentially nonmarket, noneconomic ends. This kind of thing goes back to the day when royal monopolies Broken Markets were given to joint stock companies to build out the British Empire for broke British monarchs, and it is not going away any time soon. It is all a matter of degree and balance. In the Victorian Era, the markets became free and global for several generations, but that was an anomaly backed by British wealth and sea power along with an almost mystical British belief in free trade. In the 1980s, as Daniel Yergin’s now incredibly dated documentary The Commanding Heights relates, the financial markets regained some of their freedom after half a century of financial repression and industrial policy.

 

pages: 289 words: 22,394

Virus of the Mind by Richard Brodie

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cognitive dissonance, Douglas Hofstadter, Gödel, Escher, Bach, joint-stock company, New Journalism, phenotype, Ponzi scheme, profit motive, publish or perish, Ralph Waldo Emerson, Richard Feynman, Richard Feynman, Stephen Hawking, Steven Levy

Institutions that were designed by people for the specific purpose of perpetuating and spreading, I call designer viruses. But long before anyone came up with that Machiavellian notion, viruses of the mind evolved on their own into powerful cultural fixtures. I call the institutions that evolved on their own to become self-perpetuating cultural viruses. ttt 146 C hapter nine C ultur al Viruses “Society everywhere is in conspiracy against the manhood of every one of its members. Society is a joint-stock company, in which the members agree, for the better securing of his bread to each shareholder, to surrender the liberty and culture of the eater. The virtue in most request is conformity.” — Ralph Waldo Emerson From the children’s game of “telephone,” we know that it’s difficult to copy memes with 100 percent fidelity even if we want to. When replication occurs with slight changes in the replicator, and those modified replicators are selected somehow for their fitness, then we have evolution.

 

pages: 297 words: 77,362

The Nature of Technology by W. Brian Arthur

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Andrew Wiles, business process, cognitive dissonance, computer age, double helix, Geoffrey West, Santa Fe Institute, haute cuisine, James Watt: steam engine, joint-stock company, Joseph Schumpeter, Kevin Kelly, knowledge economy, locking in a profit, Mars Rover, means of production, railway mania, Silicon Valley, Simon Singh, sorting algorithm, speech recognition, technological singularity, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions

It creates the realm our lives inhabit. If you woke some morning and found that by some odd magic the technologies that have appeared in the last six hundred years had suddenly vanished: if you found that your toilet and stove and computer and automobile had disappeared, and along with these, steel and concrete buildings, mass production, public hygiene, the steam engine, modern agriculture, the joint stock company, and the printing press, you would find that our modern world had also disappeared. You—or we, if this strange happening befell all of us—would still be left with our ideas and culture, and with our children and spouses. And we would still have technologies. We would have water mills, and foundries, and oxcarts; and coarse linens, and hooded cloaks, and sophisticated techniques for building cathedrals.

 

pages: 231 words: 72,656

A History of the World in 6 Glasses by Tom Standage

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Berlin Wall, British Empire, Colonization of Mars, Copley Medal, Edmond Halley, Edward Lloyd's coffeehouse, Eratosthenes, European colonialism, interchangeable parts, invention of agriculture, Isaac Newton, joint-stock company, laissez-faire capitalism, Lao Tzu, multiplanetary species, out of africa, South Sea Bubble, spice trade, spinning jenny, The Wealth of Nations by Adam Smith, trade route, transatlantic slave trade

In 1773 a group of traders from Jonathan's broke away and decamped to a new building, initially known as New Jonathan's. But this name did not last long, as the Gentlemen s Magazine reported: "New Jonathan's came to the resolution that instead of its being called New Jonathan's, it should be called The Stock Exchange, which is to be wrote over the door." This establishment was the forerunner of the London Stock Exchange. This period of rapid innovation in public and private finance, with the floating of joint-stock companies, the buying and selling of shares, the development of insurance schemes, and the public financing of government debt, all of which culminated in London's eventual displacement of Amsterdam as the world's financial center, is known today as the Financial Revolution. The need to fund expensive colonial wars made it necessary, and the fertile intellectual environment and speculative spirit of the coffeehouses made it possible.

 

pages: 935 words: 267,358

Capital in the Twenty-First Century by Thomas Piketty

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accounting loophole / creative accounting, Asian financial crisis, banking crisis, banks create money, Berlin Wall, Branko Milanovic, British Empire, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation coefficient, David Ricardo: comparative advantage, demographic transition, distributed generation, diversification, diversified portfolio, European colonialism, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, German hyperinflation, Gini coefficient, high net worth, Honoré de Balzac, immigration reform, income inequality, income per capita, index card, inflation targeting, informal economy, invention of the steam engine, invisible hand, joint-stock company, Joseph Schumpeter, market bubble, means of production, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, open economy, pension reform, purchasing power parity, race to the bottom, randomized controlled trial, refrigerator car, regulatory arbitrage, rent control, rent-seeking, Robert Gordon, Ronald Reagan, Simon Kuznets, sovereign wealth fund, Steve Jobs, The Nature of the Firm, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade liberalization, very high income, We are the 99%

Sources and series: see piketty.pse.ens.fr/capital21c. Flows: More Difficult to Estimate Than Stocks Another important caveat concerns the income of nonwage workers, which may include remuneration of capital that is difficult to distinguish from other income. To be sure, this problem is less important now than in the past because most private economic activity today is organized around corporations or, more generally, joint-stock companies, so a firm’s accounts are clearly separate from the accounts of the individuals who supply the capital (who risk only the capital they have invested and not their personal fortunes, thanks to the revolutionary concept of the “limited liability corporation,” which was adopted almost everywhere in the latter half of the nineteenth century). On the books of such a corporation, there is a clear distinction between remuneration of labor (wages, salaries, bonuses, and other payments to employees, including managers, who contribute labor to the company’s activities) and remuneration of capital (dividends, interest, profits reinvested to increase the value of the firm’s capital, etc.).

Economic Transparency and Democratic Control of Capital More generally, it is important, I think, to insist that one of the most important issues in coming years will be the development of new forms of property and democratic control of capital. The dividing line between public capital and private capital is by no means as clear as some have believed since the fall of the Berlin Wall. As noted, there are already many areas, such as education, health, culture, and the media, in which the dominant forms of organization and ownership have little to do with the polar paradigms of purely private capital (modeled on the joint-stock company entirely owned by its shareholders) and purely public capital (based on a similar top-down logic in which the sovereign government decides on all investments). There are obviously many intermediate forms of organization capable of mobilizing the talent of different individuals and the information at their disposal. When it comes to organizing collective decisions, the market and the ballot box are merely two polar extremes.

See IMF (International Monetary Fund) Internet bubble, 172 Investments: in­e­qual­ity of, 430–­432, 452–­455; wealth rankings and, 432–­443; university endowments and, 447–­452; alternative, 449–­450, 454, 456; petroleum and, 455–­460, 462; sovereign wealth funds and, 455–­460 Iraq, 537–­538 Italy: growth rate of, 174, 445; savings in, 177–­178, 185; public wealth in, 184–­185; wealth tax in, 528–­529, 533 Ivanishvili, Bidzina, 625n22 James, Henry, fiction of, 152, 414 Jantt, Markus, 631n28 Japan: national income and, 63–­64, 66, 68; growth in, 86, 93, 95, 174–­176, 588n10; savings in, 177–­178; foreign assets in, 192–­194; capital/income ratio in, 195; in­e­qual­ity in, 322, 445; taxation and, 490, 498, 637n31 Japa­nese bubble, 172, 597n30 Jeanne, Olivier, 645n41 Jefferson, Thomas, 158, 363 Jobs, Steve, 440–­441 Joint stock companies, 203 Jones, Alice Hanson, 159, 347 Jones, Charles I., 586n35 Judet de la Combe, P., 644n30 Judicial conservatism, 566, 653n49 Justification of in­e­qual­ity, 264 Kaldor, Nicholas, 231, 601n36, 634n1, 638n35 Kaplan, Steven N., 607n41 Katz, Lawrence, 306, 314–­315, 608n12, 640n53 Kennickell, Arthur, 347 Kesztenbaum, Lionel, 612n4 Keynes, John Maynard, 135, 220, 231–­232, 600n22, 652n44 King, Gregory, 56, 180, 590n1, 637n28 King, Willford, 348, 506, 613n13 Knowledge and skill diffusion, 21, 71, 313 Kopczuk, Wojciech, 607n38 Kotlikoff-­Summers thesis, 428, 622n63 Krueger, Alan, 313, 608n10 Krugman, Paul, 294 Kubrick, Stanley, 620n40 Kuczynski, Jürgen, 219–­220, 599n20 Kumhof, Michael, 606n32 Kuwait, 537 Kuznets, Simon, 11–­17, 20, 23, 580nn9,11,14, 581nn15–­16, 582n36, 603n4 Kuznets Curve, 13–­15, 237, 274, 336, 580n14 Labor.

 

pages: 845 words: 197,050

The Gun by C. J. Chivers

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air freight, Berlin Wall, British Empire, cuban missile crisis, defense in depth, illegal immigration, joint-stock company, Khartoum Gordon, mutually assured destruction, offshore financial centre, Ponzi scheme, RAND corporation, South China Sea, trade route, Transnistria

Its operations were limited and its prospects for large orders grim. It seemed unlikely to shut down entirely, though its security rested not in its performance as a private enterprise but in a political fact: For the Russian military, the plants that produced the rifles remained a strategic enterprise. Similar problems manifested themselves throughout the firearms sector. Another Russian Kalashnikov manufacturer, the Molot joint stock company in Kirov, which complemented the production at Izhevsk, was so cash-strapped that in late 2008 it stopped paying wages to many employees. By 2009 it compensated workers not with rubles, but with food. This was, literally, subsistence labor.78 As the workers struggled, Mikhail Kalashnikov’s stature spared him from both material suffering and idleness. He fared, if not well, at least better than many of his generation.

., 403–4 Meinertzhagen, Richard, 119–21, 426n Merz gun works, 163–64 MG08 (Maschinengewehr 08), 90, 119 Michault, Jacques, 274 Mikoyan, Anastas, 224 Miller, Mikhail, 242, 435n Mills, J. D., 36, 420n Minié balls, 33–34 Minin, Leonid, 369–71, 411 Misr, 16, 349 mitrailleur, 43–46, 51, 421n ammunition of, 43 design of, 43–44 Fosbery on, 44–45, 55–56 in Franco-Prussian War, 45–46 production of, 43 secrecy of, 43–44 tactical uses of, 45–46 Model 1873, 60 Model 1895, 108, 111, 145 Modern Traveler, The (Belloc), 103 Molot joint stock company, 400 Molotov, Vyacheslav, 212n, 219n, 221 Molotov cocktails, 219 Montigny, Joseph, 43, 46, 55 Moore, Harold G., Jr., 294–95 Morning Post, 97 mortars, 11, 216, 246, 253, 367 of LRA, 379 in Vietnam, 264, 311, 313, 317 in World War I, 121, 123, 132, 267 Morton, A. C., 103 Morton, Oliver P., 29–30 Mosin-Nagant rifle: ammunition of, 169 in Hungarian revolution, 219 production and distribution of, 155, 169, 216–17, 219, 357 Mozambique flag, 15, 384 MP-5 (Maschinenpistole 5), 384n MP-18 (Maschinenpistole 18), 139–40, 163–64, 228 MP-43 (Maschinenpistole 43), 164 MPiK (Maschinen Pistole Kalashnikov), 16, 247 mujahideen, 10, 13, 361–62 Mukhabarat, 349 Muller, Mark, 15 Mumbai, terrorist raid in, 340 Munich Olympics, terrorism at, 337–40, 350–52, 443n Museveni, Yoweri, 374, 379 musket balls, 27, 33 muzzle velocity, 167, 198, 252–53, 284, 291, 293, 383 My Life (Maxim), 135 Nadezhda, 1–2 Nagasaki, 1, 144 Nagorno-Karabakh, war for, 408 Nagy, Imre, 237–39 arrest and execution of, 239, 437n Hungarian revolution and, 222–24, 226, 238 and Hungary’s attempt to withdraw from Warsaw Pact, 237 Napoleon III, Emperor of France, 43–45 Nasser, Gamal Abdel, 216, 349, 358 Nasution, Abdul Haris, 258 National Firearms Act, 18, 236 National Rifle Association (NRA), 298 National Security Council, 237 Native Americans, see Indian wars NATO (North Atlantic Treaty Organization), 6, 169, 214, 249–50, 255–58, 352 automatic rifles used by, 256–58, 296, 364 FAL rifle distribution and, 364 M-16 and, 296 standardizing ammunition and arms of, 255–57, 275, 296, 436n, 444n Nature, 54 Navy, Union, 30 Navy, U.S., 88, 110, 272, 314–16 Gatling gun and, 40, 52–54 Vietnam and, 264, 315–16 Ndebele, 86–87, 103 needle gun (zundnadelgewehr), 42 Netherlands, 40, 246, 400 and AK-47 production and distribution, 250, 257–59 New York Times: on Civil War draft protests, 31–32 on Gatling gun, 47 Maxim’s article in, 135, 423n New York Tribune, 32 New York University, 230 Nez Percé, 61–62 Nicholas II, Czar of Russia, 113, 165, 170 Nickelson, Alfred J., 263–64, 267, 316–18, 324 Nikitin, Grigory I., 243 NIPSMVO (Research and Proving Grounds for Firearms and Mortars), 143–48, 256 AK-47 testing at, 199–201, 205 and AK and AK-type rifle design and development, 144, 146–48, 159–60, 187, 189–91, 202, 205, 345 closure of, 345–46 Kalashnikov at, 143–48, 183–87 NKVD (People’s Commissariat for Internal Affairs), 156, 158, 166 Nobel, Alfred, 390 Gatling’s quarrels with, 51–52, 55, 74 Maxim’s quarrels with, 74 Nonte, George, 297 Nordenfelt, Thorsten, 86 Nordenfelt gun, 75 automatic, 109 competition of, 53, 83–84, 86 tests and demonstrations of, 53, 84 Norinco, 399 North Atlantic Treaty Organization, see NATO North Korea, see Korea, Democratic People’s Republic of NRA (National Rifle Association), 298 nuclear programs: of Soviet Union, 1–5, 148, 203, 359–60, 407–8 of U.S., 1, 4–5, 144, 272 nuclear war, 4, 271 Nugent, Edward, 35, 420n Ocira, Walter, 337 October Revolution, 156, 167, 170, 193, 351 Okwera, Jimmy, 372–73 Okwera, Patrick, 372–73 Okwonga, Dennis, 379 Olivier, Alfred G., 285–88 Omar, Mullah Mohammed, 386–87 Omdurman: casualties in, 98–102 fighting at, 97–102, 107–9, 119, 124, 129–30, 165, 252, 255 Maxim guns at, 97–102, 107–8, 124, 165, 252 “On the Personality Cult and Its Consequences” (Khrushchev), 244 Operations Research Office, 254 Ottoman Empire, 42 Owen, J.

 

pages: 700 words: 201,953

The Social Life of Money by Nigel Dodd

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accounting loophole / creative accounting, bank run, banking crisis, banks create money, Bernie Madoff, bitcoin, blockchain, borderless world, Bretton Woods, BRICs, capital controls, cashless society, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, computer age, conceptual framework, credit crunch, cross-subsidies, David Graeber, debt deflation, dematerialisation, disintermediation, eurozone crisis, fiat currency, financial innovation, Financial Instability Hypothesis, financial repression, floating exchange rates, Fractional reserve banking, German hyperinflation, Goldman Sachs: Vampire Squid, Hyman Minsky, illegal immigration, informal economy, interest rate swap, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, Kula ring, laissez-faire capitalism, land reform, late capitalism, liquidity trap, litecoin, London Interbank Offered Rate, M-Pesa, Marshall McLuhan, means of production, mental accounting, microcredit, mobile money, money: store of value / unit of account / medium of exchange, mortgage debt, new economy, Nixon shock, Occupy movement, offshore financial centre, paradox of thrift, payday loans, Peace of Westphalia, peer-to-peer lending, Ponzi scheme, post scarcity, postnationalism / post nation state, predatory finance, price mechanism, price stability, quantitative easing, quantitative trading / quantitative finance, remote working, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Satoshi Nakamoto, Scientific racism, seigniorage, Skype, Slavoj Žižek, South Sea Bubble, sovereign wealth fund, special drawing rights, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, Wave and Pay, WikiLeaks, Wolfgang Streeck, yield curve, zero-coupon bond

This taking defines financial capitalism, wherein the logic of primitive accumulation connects to later theories of imperialism and finance capital (Harvey 2006: xvii). According to Harvey, it is the role of the state in this process (accumulation by dispossession) that presents the greatest analytical challenge for Marxism. The basic ingredients of such an analysis can be found in Marx’s own treatment of the centralization of capital, as joint stock companies and monopolies and cartels develop to curtail capital’s anarchic qualities. Engels provides further insight, arguing that the state eventually becomes the official representative of capitalist society. This notion is subsequently elaborated by Hilferding and Lenin as finance capital, i.e., a unification of banking and productive capital (Harvey 2006: 137). Primitive accumulation (or accumulation by dispossession) is an alternative to Keynesian demand management (Harvey 2010b: 108).

Proudhon described the Bank of the People as the translation into economic language of the principles that had underwritten modern democracy and the French Revolution: liberty, equality, and fraternity (Proudhon 1927: 94). The Bank of the People promised to be a realization of the financial formula of the principle of reciprocity itself. Although Proudhon intended that the Bank of the People would eventually be turned into a joint-stock company, in the first instance it had to operate as a partnership, with a general manager, a supervising council consisting of thirty delegates, and a general assembly with one thousand members. Should the Bank of the People fail, assets would be divided “among those who are entitled to them” (Proudhon 1927: 112). And, indeed, the Bank of the People was short-lived. By early April, he announced that the experiment was coming to an end: events, he said, had “proved too strong for it.”

 

pages: 726 words: 172,988

The Bankers' New Clothes: What's Wrong With Banking and What to Do About It by Anat Admati, Martin Hellwig

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Andrei Shleifer, asset-backed security, bank run, banking crisis, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, bonus culture, Carmen Reinhart, central bank independence, centralized clearinghouse, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, diversified portfolio, en.wikipedia.org, Exxon Valdez, financial deregulation, financial innovation, financial intermediation, George Akerlof, Growth in a Time of Debt, income inequality, invisible hand, Jean Tirole, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, London Interbank Offered Rate, Long Term Capital Management, margin call, Martin Wolf, moral hazard, mortgage debt, mortgage tax deduction, Nick Leeson, Northern Rock, open economy, peer-to-peer lending, regulatory arbitrage, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Robert Shiller, shareholder value, sovereign wealth fund, technology bubble, The Market for Lemons, the payments system, too big to fail, Upton Sinclair, Yogi Berra

Note that Kate’s equity, which will be the equivalent of “capital” in the banking context, is always invested in the house; it is tied up there but is not idle and is not a cash reserve. Chapter 6 discusses again the pervasive confusion about the term bank capital, already mentioned in Chapter 1. 10. There are many forms of limited-liability companies, with legal details varying across countries and even across companies. For joint-stock companies, that is, corporations whose shares are publicly traded, many features of governance and control, such as public reporting obligations, are specified by law or regulation; this provides investors with the means to acquire the information they need for their purchasing decisions. In companies whose shares are not publicly traded there is much less need for investor protection, so there is great flexibility to determine the company’s governance in the corporate charter.

., 291n31 Japan: Kobe earthquake of 1995 in, 55; lobbying by banks of, 231n10; monopoly power of banks in, 249n12, 275n4; nuclear disaster of 2011 in, xi, 206–7; opposition to banking reform in, 193, 231n12 Japanese crisis of 1990s: insolvency of many banks in, 333n41; international impact of, 61, 65, 258n25; Principle of Unripe Time in, 171; resolution issues in, 264n70; versus subprime mortgage crisis in United States, 60, 61 Jenkins, Antony, 283n17 Jenkins, Patrick, 230n6, 280n1, 335n52 Jenkins, Robert, 311n53 Jensen, Michael C., 242n17, 305n22 Jimmy Stewart Is Dead (Kotlikoff), 247n1 Jöeveer, Karin, 290n29 Johnson, Simon, 248n3, 269nn27–28, 270n33, 311n54, 319n9, 325nn49–51, 325n54, 326n58, 332n30, 333n40 joint-stock companies, 240n10 Jordà, Oscar, 233nn18–19 JPmorgan Chase: actual balance sheet of, 84–87, 84f, 266n11, 266n14, 267nn15–16, 317n88; in Bear Stearns bailout, 72, 74, 219, 326n58; on capital requirements, 265n5; and costs of resolution, 78; “fortress balance sheet” of, 83–87, 266n6; large trading losses of, 78, 260n39, 328n6; lending as fraction of activities of, 86, 267n18; market value versus book value of equity of, 86–87, 113–14; mistakes admitted by, 232n17; off-balance-sheet commitments of, 83, 84, 266n7; payouts to shareholders by, 182, 312n57; potential damage caused by default of, 10–11; regulatory capture by, 205, 326n58; risk management at, 285n38; scandals involving, 328n6; stock price of, 86, 87; versus UBS, 267n18; on “unintended consequences,” 231n10; value of debt of, 12, 85; vulnerability of, 83, 86, 87.

 

pages: 709 words: 191,147

White Trash: The 400-Year Untold History of Class in America by Nancy Isenberg

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back-to-the-land, British Empire, California gold rush, colonial rule, Copley Medal, desegregation, Donald Trump, feminist movement, full employment, indoor plumbing, invisible hand, joint-stock company, land reform, land tenure, New Urbanism, Plutocrats, plutocrats, Republic of Letters, Ronald Reagan, Scientific racism, The Wealth of Nations by Adam Smith, theory of mind, trade route, transcontinental railway, trickle-down economics, upwardly mobile, urban renewal, War on Poverty, working poor, Works Progress Administration

In the garden paradise of early Virginia that never was, war and suffering, greed and colonial conquest are conveniently missing. Class and cultural dissonance magically fade from view in order to remake American origins into a utopian love story.13 • • • Can we handle the truth? In the early days of settlement, in the profit-driven minds of well-connected men in charge of a few prominent joint-stock companies, America was conceived of in paradoxical terms: at once a land of fertility and possibility and a place of outstanding wastes, “ranke” and weedy backwaters, dank and sorry swamps. Here was England’s opportunity to thin out its prisons and siphon off thousands; here was an outlet for the unwanted, a way to remove vagrants and beggars, to be rid of London’s eyesore population. Those sent on the hazardous voyage to America who survived presented a simple purpose for imperial profiteers: to serve English interests and perish in the process.

Ralph Borsodi, who set up a subsistence homestead on the outskirts of New York City, helped to organize a cooperative village near Dayton, Ohio. Similar ventures appeared in other states. The southern journalist Charles Morrow Wilson described these folks as “American peasants,” but they are perhaps better described as the heirs of James Oglethorpe’s eighteenth-century Georgia colonists. One such group from Tulsa established a community in the Ozark hills. They founded a corporation, much like the older joint-stock companies, and adopted a set of bylaws, in which each member was a shareholder and had a vote. They sold timber, raised hogs and chickens, repaired the lumbering shanties on the property, and set up a school.17 Unlike Arkansas tenant farmers and sharecroppers, the Tulsa colonists owned the land, albeit land of little value, which lowered them to the level of subsistence farmers. The common pattern in Arkansas was different.

 

pages: 777 words: 186,993

Imagining India by Nandan Nilekani

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affirmative action, BRICs, British Empire, business process, business process outsourcing, call centre, clean water, colonial rule, corporate governance, cuban missile crisis, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, distributed generation, farmers can use mobile phones to check market prices, full employment, ghettoisation, glass ceiling, global supply chain, Hernando de Soto, income inequality, informal economy, joint-stock company, knowledge economy, labour market flexibility, land reform, LNG terminal, load shedding, Mahatma Gandhi, market fragmentation, Mikhail Gorbachev, Network effects, new economy, New Urbanism, open economy, pension reform, Potemkin village, price mechanism, race to the bottom, rent control, rolodex, Ronald Reagan, school vouchers, Silicon Valley, smart grid, special economic zone, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transaction costs, trickle-down economics, unemployed young men, upwardly mobile, urban planning, urban renewal, women in the workforce, working poor, working-age population

The rise of new navigation tools—better maps, sextants and chronometers—also allowed explorers to chart out better sea routes, giving Europe access to colonies, slaves, silks and gold. The tiny island of Britain emerged as the major European power in the eighteenth century with innovations in public finance and an embryonic stock market. These institutions created richly funded, powerful companies that quickly dominated global trade—our old acquaintance the East India Company was in fact the very first “joint-stock” company of Britain. And of course, the technological prowess of the Industrial Revolution enabled Britain and Europe to dominate world economic growth for more than a hundred years. In this context, India has been fortunate even in its barriers. In the 1970s and 1980s, IT was literally the only option for a start-up entrepreneur to begin a business without political access or capital. A slow-growing economy also ended up diverting much of its huge talent into a small but burgeoning IT sector, and these firms got by on very little—a leased computer, a data line—over which they sold Indian brainpower to the outside world.

CEO Forum Industrial Development and Regulation Act (1951) Industrial Revolution infant mortality rates inflation information technology (IT); acceptance of; in agriculture ; in banking ; caste identification and; computers in ; economic impact of ; education and ; for energy sources; entrepreneurs in; for environmental issues; “gatekeepers” eliminated by ; in global economy ; government policies on ; growth of ; for health care ; identity cards supported by; Internet access of ; investment in ; jobs created by ; kiosks for ; for land records, ; low-cost approach of; outsourcing of; see also business process outsourcing; paperwork eliminated by; political applications of; poverty alleviated by ; for railroad schedules ; for retirement funds ; in rural areas ; for social services; for stock exchanges ; for taxation; technological revolution in; in telecommunications ; in urban areas ; for voting ; see also software industry Infosys Technologies Institution for Human Settlements insurance industry Insurance Regulatory Authority of India (IRAI) Integrated Energy Policy interest rates Intergovernmental Panel on Climate Change (IPCC) International Food Policy Research Institute International Monetary Fund (IMF) International Water Management Institute International Year of the Aged Invest India Foundation investment, capital Iran Ireland iron irrigation ISO 9000 certifications Israel Ivory Coast Iyengar, Haravu Raj Jaffrelot, Christophe Jain, L. C. Jallianwala Bagh attack (1919) Jammu Janaagraha Janata Dal Jan Sangh Japan jatropha jaundice Jawaharlal Nehru National Urban Renewal Mission (JNNURM) Jayakar Commission (1927) Jejeebhoy, Lady Avia Jharkhand Jiang Zemin Jindal Steel Jinnah, Mohammed Ali job creation job retraining job security Johnson, Lyndon B. “joint-stock” companies Joshi, Murli Manohar Joshi, Rajendra jugaad vehicle jute Kabir, Humayun Kahn, E. J. Kamaraj, K. Kamath, H. V. Kannada language Kapoor, Anil Karat, Prakash Karnataka Kashmir Katara, Neelam Katara, Nitish Kaur, Rajkumari Amrit Kaviraj, Sudipta Kelkar, Vijay Keniston, Kenneth Kerala kerosene Khan, Ajit Khan, Kushboo Khan, Mehboob Khanna, Parag Kheny, Ashok Khilnani, Sunil Khosla, Vinod King, Robert Kishwar, Madhu Koenigsberger, Otto Kohli, Atul Kohli, K.

 

pages: 273 words: 93,419

Let them eat junk: how capitalism creates hunger and obesity by Robert Albritton

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Bretton Woods, California gold rush, clean water, collective bargaining, computer age, corporate personhood, deindustrialization, Food sovereignty, Haber-Bosch Process, illegal immigration, immigration reform, invisible hand, joint-stock company, joint-stock limited liability company, land reform, late capitalism, means of production, offshore financial centre, oil shale / tar sands, peak oil, price stability, profit maximization, profit motive, South Sea Bubble, the built environment, union organizing, Unsafe at Any Speed, upwardly mobile

Second, the mobilization and concentration of social savings through institutions, such as banks and stock markets, that grant credit to capital, also facilitate concentration into larger units. 44 L E T T H E M E AT J U N K In order to understand something like the “merger movement” of the late nineteenth century, however, we need to move to midrange theory and historical analysis, because many of the causal factors are phase-specific and cannot therefore be derived from capital in the abstract and in general. In England, for example, the leading capitalist power in the world until the late nineteenth century, the corporate form had been legally constrained since the burst of the South Sea Bubble in 1720, which nearly bankrupted the country.39 Giving the limited-liability joint stock company the legal go-ahead was a prerequisite for the merger movement of the late nineteenth century. Other causal factors or conditions of existence of the merger movement would include: • • • • • • • • • the development of financial institutions, like banks and stock markets the increasing movement of capital into resource extraction and heavy industry where economies of scale are important protective tariffs and dumping government spending on infrastructure and military build-ups the need to control a more militant work force the need for corporations to influence government policy better transportation and communication technologies the increasing importance of having a global reach in many industries for the cheapest resource extraction inter-imperialist rivalry.

 

pages: 334 words: 98,950

Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism by Ha-Joon Chang

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affirmative action, Albert Einstein, Big bang: deregulation of the City of London, bilateral investment treaty, borderless world, Bretton Woods, British Empire, Brownian motion, call centre, capital controls, central bank independence, colonial rule, Corn Laws, corporate governance, David Ricardo: comparative advantage, Deng Xiaoping, Doha Development Round, en.wikipedia.org, falling living standards, Fellow of the Royal Society, financial deregulation, fixed income, Francis Fukuyama: the end of history, income inequality, income per capita, industrial robot, Isaac Newton, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, labour mobility, land reform, low skilled workers, market bubble, market fundamentalism, Martin Wolf, means of production, moral hazard, offshore financial centre, oil shock, price stability, principal–agent problem, Ronald Reagan, South Sea Bubble, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transfer pricing, urban sprawl, World Values Survey

In 1716, after years of lobbying, Law was given a licence by the French government to set up a note-issuing bank, Banque Générale. His main backer was the Duc d’Orléans, Louis XIV’s nephew and the then regent for the child king, Louis XV, the great-grandson of Louis XIV. In 1718, Banque Générale became Banque Royale, with its notes guaranteed by the king. In the meantime, Law bought the Compagnie du Mississippi (the Mississippi Company) in 1717 and floated it as a joint-stock company. The company absorbed other rival trading companies and, in 1719, became Compagnie Perpetuelle des Indes, although it was still commonly called Compagnie du Mississippi. The company had a royal monopoly on all overseas trading.With Law launching high-profile settlement schemes in Louisiana (French North America) and generating rumours vastly exaggerating their prospects, a speculative frenzy on the company’s stocks started in the summer of 1719.

 

pages: 340 words: 91,387

Stealth of Nations by Robert Neuwirth

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accounting loophole / creative accounting, big-box store, British Empire, call centre, collective bargaining, corporate governance, full employment, Hernando de Soto, illegal immigration, income inequality, informal economy, invisible hand, Jane Jacobs, jitney, joint-stock company, Joseph Schumpeter, megacity, microcredit, New Urbanism, pirate software, profit motive, Shenzhen was a fishing village, Simon Kuznets, special economic zone, The Wealth of Nations by Adam Smith, thinkpad, upwardly mobile

It’s a great economic fantasy: the master unwittingly shares everything equally with his slaves; lords and ladies with their servants; royalty with the plebes; bosses with their workers; and capitalism is really communism. But Smith must have known that it wasn’t true. Even in his time, the rich didn’t restrict their consumption to little more than the poor (King George II received an annual allotment of almost £900,000 from the national treasury to support his retinue, while the average clerk at a joint stock company earned perhaps £200 a year and the average laborer more likely on the order of £50) and, left to their own devices, didn’t ensure that the necessities of life were apportioned equally among all (otherwise there would have been no need for the aristocracy to pass the Poor Laws, which treated unemployment and poverty as crimes rather than as consequences of other people’s economic decisions).

 

pages: 290 words: 87,084

Branded Beauty by Mark Tungate

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augmented reality, Berlin Wall, call centre, corporate social responsibility, double helix, East Village, Fall of the Berlin Wall, Frank Gehry, haute couture, invention of the printing press, joint-stock company, placebo effect, Ray Kurzweil, Silicon Valley, stem cell

This resulted in a new Art Deco logo in the shape of a camellia, and a range of fragrances in packaging with distinctive arabesque graphics. The company established a reputation for supporting budding artists: in 1919 it opened a gallery at its headquarters; this still exists, having hosted more than 3,000 exhibitions and displayed the works of over 5,000 artists. Shiseido was incorporated as a joint stock company in 1927, with Shizo as its first president. Over the coming years, it followed five management principles. They were: 1) quality above all – absolute excellence is pursued in everything created; 2) coexistence and co-prosperity – everyone associated with Shiseido must benefit in a consequent way; 3) respect for consumers; 4) corporate stability – respect for the company’s past achievements and choice of intelligent goals for the future; and 5) sincerity – loyalty and honesty are the fundamental principles of business.

 

pages: 346 words: 101,255

The Big Necessity: The Unmentionable World of Human Waste and Why It Matters by Rose George

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American Society of Civil Engineers: Report Card, Anton Chekhov, Celtic Tiger, clean water, glass ceiling, indoor plumbing, informal economy, job satisfaction, John Snow's cholera map, joint-stock company, land reform, New Urbanism, Potemkin village, Report Card for America’s Infrastructure, Steven Pinker, urban planning

A great rough sort of business Throughout the late nineteenth century, plenty of sewage farming systems were proposed to the Metropolitan Board of London. In fact, wrote the anonymous author of one report, “Had the application of sewage to agricultural purposes been as easy and as profitable as some loud-talking and fluently-writing people pretend, it would long since have formed the foundation of more than one joint-stock company.” The Agricultural Value of the Sewage of London Examined in Reference to the Principle Systems Admitted to the Metropolitan Board of Works (London: Edward Stanford & Co., 1865), pp. 17–18, 38. Stench On July 11, 2007, a Mogden resident called Fullalove sent the following complaint to Thames Water: “FOUL YUK STINK STENCH I CANNOT BREATHE IT IS YOUR FAULT.” Two weeks later, his neighbor Jonathan Oatway wrote despairingly that Mogden was “absolutely reeking again after the rain.

 

pages: 349 words: 112,333

The Mark Inside: A Perfect Swindle, a Cunning Revenge, and a Small History of the Big Con by Amy Reading

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Frederick Winslow Taylor, glass ceiling, joint-stock company, new economy, shareholder value, transcontinental railway, upwardly mobile

The question was how to extract profit from those promising pieces of paper. Moffat, Chaffee, Tabor, and Smith could simply sit in their downtown lairs, receive a steady stream of prospectors and engineers from the mountains who spieled about the invisible richness of their properties, and decide whom to buy out and enfold into their ongoing mining operations. But most entrepreneurs looking to finance the exploration and extraction of gold or silver formed joint-stock companies, hired promoters, and sent them to New York and Boston to chase down the money where it lived. The promoter would arrive in an eastern city with a prospectus carefully worded to appeal directly to the heart of the second-tier businessman, someone who admired the market manipulations of Jay Gould and Cornelius Vanderbilt in the newspapers but could not himself command enough capital to replicate those feats of enterprise and greed.

 

pages: 385 words: 111,807

A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

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Affordable Care Act / Obamacare, Albert Einstein, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land reform, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Washington Consensus, working-age population, World Values Survey

Marx was the first economist to pay attention to the differences between the two key institutions of capitalism – the hierarchical, planned order of the firm and the (formally) free, spontaneous order of the market. He described capitalist firms as islands of rational planning in an anarchic sea of the market. Moreover, he foresaw that large-scale enterprises owned by multitudes of shareholders with limited liability – which were called ‘joint stock companies’ in his time – would become the leading actors of capitalism, at a time when most free-market economists were still against the very idea of limited liability. Unlike most other economists, Marx and some of his followers have paid attention to work for its own sake, rather than as a disutility that people have to put up with in order to earn money to pay for their consumption. He believed that work can allow human beings to express their inherent creativity.

 

pages: 317 words: 87,566

The Happiness Industry: How the Government and Big Business Sold Us Well-Being by William Davies

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1960s counterculture, Airbnb, business intelligence, Cass Sunstein, corporate governance, dematerialisation, experimental subject, Exxon Valdez, Frederick Winslow Taylor, Gini coefficient, income inequality, invisible hand, joint-stock company, market bubble, mental accounting, nudge unit, profit maximization, randomized controlled trial, Richard Thaler, road to serfdom, Ronald Coase, Ronald Reagan, science of happiness, sentiment analysis, sharing economy, Slavoj Žižek, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, Steve Jobs, The Chicago School, The Spirit Level, theory of mind, urban planning

In this society, political authority lies with those who are most expert to measure and manage individuals. There is no reason why administration of this nature should be handled by the state directly, as so many neoliberal regimes have more recently discovered. Anticipating Thatcherism and workfare nearly two centuries beforehand, one of Bentham’s policy recommendations was for the state to establish a National Charity Company (a joint stock company, modelled on the East India Company), which would alleviate poverty by employing hundreds of thousands of people in privately managed ‘industry houses’.21 His proposal for the Panopticon also included a recommendation for private firms to build and run the prisons, with a license provided by the state. Not content with reconceiving the very basis of legal authority, Jeremy Bentham can be viewed as the godfather of public sector outsourcing.

 

CultureShock! Egypt: A Survival Guide to Customs and Etiquette (4th Edition) by Susan L. Wilson

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air freight, anti-communist, call centre, joint-stock company, joint-stock limited liability company, land reform, RAND corporation, telemarketer, trade route

There was no delay and no hassle, and everyone left satisfied (except, of course, for the fact that the goods were still missing). SETTING UP A BUSINESS Several types of business organisations exist in Egypt, generally in the form of incorporated companies, partnerships and sole proprietorships. Foreigners are rarely interested in the unincorporated forms used by Egyptian traders. Most foreign investors choose the Limited Liability Company, known as a WLL (with limited liability). The Joint Stock Company (Shareholder Company) is the most commonly used form of corporate business entity in Egypt. Foreign investors may carry on business in Egypt through a branch office. However, this provides no tax advantage. Companies whose sole interest is the exportation of goods to Egypt must generally appoint a local agent who must be an Egyptian national or company. Labour requirements apply to all companies whose capital exceeds E£ 50,000. 268 CultureShock!

 

pages: 376 words: 109,092

Paper Promises by Philip Coggan

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accounting loophole / creative accounting, balance sheet recession, bank run, banking crisis, barriers to entry, Berlin Wall, Bernie Madoff, Black Swan, Bretton Woods, British Empire, call centre, capital controls, Carmen Reinhart, carried interest, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, debt deflation, delayed gratification, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, falling living standards, fear of failure, financial innovation, financial repression, fixed income, floating exchange rates, full employment, German hyperinflation, global reserve currency, hiring and firing, Hyman Minsky, income inequality, inflation targeting, Isaac Newton, joint-stock company, Kenneth Rogoff, labour market flexibility, Long Term Capital Management, manufacturing employment, market bubble, market clearing, Martin Wolf, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Nick Leeson, Northern Rock, oil shale / tar sands, paradox of thrift, peak oil, pension reform, Plutocrats, plutocrats, Ponzi scheme, price stability, principal–agent problem, purchasing power parity, quantitative easing, QWERTY keyboard, railway mania, regulatory arbitrage, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, The Chicago School, The Great Moderation, The Wealth of Nations by Adam Smith, time value of money, too big to fail, trade route, tulip mania, value at risk, Washington Consensus, women in the workforce

Had the scheme been kept on a modest scale, with bank notes backed by gold and silver, French economic growth might indeed have been boosted over the long run. Trade would have increased, and so would the monarch’s tax revenues, making the debts easier to service. But the regent wanted, and Law had promised, quicker results. The aim was to repay the monarch’s debt. This involved creating a joint-stock company, the Compagnie d’Occident, to exploit France’s colonial possessions in the Mississippi basin. At the time, the Dutch and British were having success in exploiting the ‘spice islands’ through their East Indies companies. France aimed to do the same thing in America. Again, given enough time, the Compagnie d’Occident (or the Mississippi Company, as it became known) might have been successful.

 

pages: 347 words: 99,317

Bad Samaritans: The Guilty Secrets of Rich Nations and the Threat to Global Prosperity by Ha-Joon Chang

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affirmative action, Albert Einstein, banking crisis, Big bang: deregulation of the City of London, bilateral investment treaty, borderless world, Bretton Woods, British Empire, Brownian motion, call centre, capital controls, central bank independence, colonial rule, Corn Laws, corporate governance, David Ricardo: comparative advantage, Deng Xiaoping, Doha Development Round, en.wikipedia.org, falling living standards, Fellow of the Royal Society, financial deregulation, fixed income, Francis Fukuyama: the end of history, income inequality, income per capita, industrial robot, Isaac Newton, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, labour mobility, land reform, low skilled workers, market bubble, market fundamentalism, Martin Wolf, means of production, moral hazard, offshore financial centre, oil shock, price stability, principal–agent problem, Ronald Reagan, South Sea Bubble, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transfer pricing, urban sprawl, World Values Survey

In 1716, after years of lobbying, Law was given a licence by the French government to set up a note-issuing bank, Banque Générale. His main backer was the Duc d’Orléans, Louis XIV’s nephew and the then regent for the child king, Louis XV, the great-grandson of Louis XIV. In 1718, Banque Générale became Banque Royale, with its notes guaranteed by the king. In the meantime, Law bought the Compagnie du Mississippi (the Mississippi Company) in 1717 and floated it as a joint-stock company. The company absorbed other rival trading companies and, in 1719, became Compagnie Perpetuelle des Indes, although it was still commonly called Compagnie du Mississippi. The company had a royal monopoly on all overseas trading. With Law launching high-profile settlement schemes in Louisiana (French North America) and generating rumours vastly exaggerating their prospects, a speculative frenzy on the company’s stocks started in the summer of 1719.

 

pages: 322 words: 88,197

Wonderland: How Play Made the Modern World by Steven Johnson

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Ada Lovelace, Alfred Russel Wallace, Antoine Gombaud: Chevalier de Méré, Berlin Wall, bitcoin, Book of Ingenious Devices, Buckminster Fuller, Claude Shannon: information theory, Clayton Christensen, colonial exploitation, computer age, conceptual framework, crowdsourcing, cuban missile crisis, Drosophila, Fellow of the Royal Society, game design, global village, Hedy Lamarr / George Antheil, HyperCard, invention of air conditioning, invention of the printing press, invention of the telegraph, Islamic Golden Age, Jacquard loom, Jacquard loom, Jacques de Vaucanson, James Watt: steam engine, Jane Jacobs, John von Neumann, joint-stock company, Joseph-Marie Jacquard, Landlord's Game, lone genius, megacity, Minecraft, Murano, Venice glass, music of the spheres, Necker cube, New Urbanism, Oculus Rift, On the Economy of Machinery and Manufactures, pattern recognition, pets.com, placebo effect, probability theory / Blaise Pascal / Pierre de Fermat, profit motive, QWERTY keyboard, Ray Oldenburg, spice trade, spinning jenny, statistical model, Steve Jobs, Steven Pinker, Stewart Brand, supply-chain management, talking drums, the built environment, The Great Good Place, the scientific method, The Structural Transformation of the Public Sphere, trade route, Turing machine, Turing test, Upton Sinclair, urban planning, Victor Gruen, Watson beat the top human players on Jeopardy!, white flight, Whole Earth Catalog, working poor, Wunderkammern

Barker also imagined an entire built structure to house his illusion, with concealed overhead lighting and an entrance through stairs below the viewing platform. (A doorway stuck in the middle of the painting would break the spell.) He was granted a patent in 1787 for “an entire new Contrivance of Apparatus . . . for the Purpose of displaying Views of Nature at large.” After successful prototype exhibitions in Edinburgh, Barker relocated to London, where he formed a joint-stock company, backed by a handful of wealthy investors, and began scouting for a site in the West End where he could produce his immersive spectacle to full effect. He sent his son to the roof of the Albion mills near Blackfriars Bridge to sketch the skyline of London, the way the two of them had captured Edinburgh from Calton Hill. At the suggestion of a “classical friend,” Barker hit upon a name for his creation, drawing on the Greek phrase for “all-encompassing view.”

 

pages: 440 words: 108,137

The Meritocracy Myth by Stephen J. McNamee

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affirmative action, Affordable Care Act / Obamacare, Bernie Madoff, British Empire, collective bargaining, computer age, conceptual framework, corporate governance, deindustrialization, delayed gratification, demographic transition, desegregation, deskilling, equal pay for equal work, estate planning, failed state, fixed income, gender pay gap, Gini coefficient, glass ceiling, helicopter parent, income inequality, informal economy, invisible hand, job automation, joint-stock company, labor-force participation, low-wage service sector, marginal employment, Mark Zuckerberg, mortgage debt, mortgage tax deduction, new economy, New Urbanism, obamacare, occupational segregation, pink-collar, Plutocrats, plutocrats, Ponzi scheme, post-industrial society, prediction markets, profit motive, race to the bottom, random walk, school choice, Scientific racism, Steve Jobs, The Bell Curve by Richard Herrnstein and Charles Murray, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trickle-down economics, upwardly mobile, We are the 99%, white flight, young professional

Even then, such establishments run the risk of being swallowed up by larger concerns seeking entry into niche markets, especially if these niches yield high returns and offer opportunities for national or global expansion. We now turn our attention to the flip side of declining self-employment: the growth of corporate production and employment. Swimming with the Sharks: The Ascent of the Modern Corporation At the time of the American Revolution, corporations did not exist. During colonial times, a handful of joint stock companies, such as the East India Company, the Massachusetts Bay Company, and the Hudson Bay Company, were chartered by the British Crown to reap the bounty of the New World (Derber 1998). With the establishment of American independence, a few establishments were granted corporate charters by states and sometimes the federal government to provide specific public services, such as roads, bridges, colleges, or canals.

 

When the Money Runs Out: The End of Western Affluence by Stephen D. King

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Albert Einstein, Asian financial crisis, asset-backed security, banking crisis, Basel III, Berlin Wall, Bernie Madoff, British Empire, capital controls, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, congestion charging, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cross-subsidies, debt deflation, Deng Xiaoping, Diane Coyle, endowment effect, eurozone crisis, Fall of the Berlin Wall, financial innovation, financial repression, floating exchange rates, full employment, George Akerlof, German hyperinflation, Hyman Minsky, income inequality, income per capita, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, London Interbank Offered Rate, loss aversion, market clearing, moral hazard, mortgage debt, new economy, New Urbanism, Nick Leeson, Northern Rock, Occupy movement, oil shale / tar sands, oil shock, price mechanism, price stability, quantitative easing, railway mania, rent-seeking, reserve currency, rising living standards, South Sea Bubble, sovereign wealth fund, technology bubble, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, trickle-down economics, Washington Consensus, women in the workforce, working-age population

This difficulty must fall somewhere and must necessarily be severely felt by a large portion of mankind.2 As it turned out, Malthus wrote his Essay at just the wrong time. The nineteenth century witnessed the arrival of the Industrial Revolution, an extraordinary leap forward in economic and financial affairs. New steam-­related technologies emerged to deliver enormous productivity gains. Financial innovations – the growth of the joint-­stock company, the development of banks and other financial institutions – allowed savings to be channelled more effectively into the new investment opportunities. Back-­breaking work slowly disappeared, the children of labourers – on the land and in the factories – became the aspirational middle classes and per capita incomes went through the roof: between 1820 and 1900, the incomes of British citizens rose 167 per cent.

 

pages: 503 words: 131,064

Liars and Outliers: How Security Holds Society Together by Bruce Schneier

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airport security, barriers to entry, Berlin Wall, Bernie Madoff, Bernie Sanders, Brian Krebs, Broken windows theory, carried interest, Cass Sunstein, Chelsea Manning, corporate governance, crack epidemic, credit crunch, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, David Graeber, desegregation, don't be evil, Double Irish / Dutch Sandwich, Douglas Hofstadter, experimental economics, Fall of the Berlin Wall, financial deregulation, George Akerlof, hydraulic fracturing, impulse control, income inequality, invention of agriculture, invention of gunpowder, iterative process, Jean Tirole, John Nash: game theory, joint-stock company, Julian Assange, meta analysis, meta-analysis, microcredit, moral hazard, mutually assured destruction, Nate Silver, Network effects, Nick Leeson, offshore financial centre, patent troll, phenotype, pre–internet, principal–agent problem, prisoner's dilemma, profit maximization, profit motive, race to the bottom, Ralph Waldo Emerson, RAND corporation, rent-seeking, RFID, Richard Thaler, risk tolerance, Ronald Coase, security theater, shareholder value, slashdot, statistical model, Steven Pinker, Stuxnet, technological singularity, The Market for Lemons, The Nature of the Firm, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, too big to fail, traffic fines, transaction costs, ultimatum game, UNCLOS, union organizing, Vernor Vinge, WikiLeaks, World Values Survey, Y2K

Some people consider their morality to be central to their self-identity, while others consider it to be more peripheral. René Girard uses the term “spiritual geniuses” to describe the most moral of people. We also describe many of them as martyrs; being differently moral can be dangerous.5 Society, of course, wants the group interest to prevail. Ralph Waldo Emerson wrote: Society is a joint-stock company, in which the members agree, for the better securing of his bread to each shareholder, to surrender the liberty and culture of the eater. The virtue in most request is conformity. Self-reliance is its aversion. It loves not realities and creators, but names and customs. Henry David Thoreau talks about how he went along with the group norm, despite what his morals told him: The greater part of what my neighbors call good I believe in my soul to be bad, and if I repent of anything, it is very likely to be my good behavior.

 

A Voyage Long and Strange: On the Trail of Vikings, Conquistadors, Lost Colonists, and Other Adventurers in Early America by Tony Horwitz

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airport security, Atahualpa, back-to-the-land, Bartolomé de las Casas, Colonization of Mars, Columbian Exchange, dematerialisation, diversified portfolio, Francisco Pizarro, Hernando de Soto, illegal immigration, joint-stock company, out of africa, Ralph Waldo Emerson, trade route, urban renewal

In 1606, not a single English settler occupied the future United States, unless some of the Roanoke colonists remained alive after twenty years in the wild. At home, however, much had changed since Raleigh’s failed venture in the 1580s. The defeat of the Spanish Armada boosted England’s confidence and sea power, and in 1604, King James concluded an uneasy peace with Spain. England’s colonial philosophy had also matured. In place of the Raleigh model, reliant on piracy and the purse of a rich knight, merchants formed joint-stock companies to raise capital and to pool the risk and profit. The Virginia Company, chartered in 1606, had branches in London and Plymouth, the former focused on the Chesapeake and the latter on “North Virginia”—roughly, the coast from New York to Maine. Despite this corporate footing, and support from the Crown, the company’s Chesapeake venture went badly from the start. Three ships carrying 105 colonists left London in 1606 and instantly hit foul weather, delaying the fleet and fraying tempers.

 

pages: 505 words: 137,572

Dr. Johnson's London: Coffee-Houses and Climbing Boys, Medicine, Toothpaste and Gin, Poverty and Press-Gangs, Freakshows and Female Education by Liza Picard

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clean water, double entry bookkeeping, joint-stock company, New Urbanism, Plutocrats, plutocrats, South Sea Bubble

After all, ‘the poor are a large as well as useful part of the community … they have a just claim to the protection of the rich … If affluence and independence could universally prevail, the benevolent would not experience the inexpressible pleasure of relieving the distressed.’1 The state did not yet concern itself with welfare. At parish level, the administration of the Poor Law left much to be desired. It was unlikely that an individual would ever again have the money and the inclination to found a charity on his own. So, despite the shadow over joint-stock companies since the South Sea Bubble had burst in 1720, the answer had to be a joint exercise of concerned individuals. By mid-century an Englishman could pride himself on ‘the many noble Foundations for the relief of the miserable and the friendless, [and] the large annual supplies from voluntary charities to these Foundations’.2 Foundlings Think of a pregnant girl without resources, employed in a job – almost certainly domestic service – which she will lose if she bears a child.

 

Stocks for the Long Run, 4th Edition: The Definitive Guide to Financial Market Returns & Long Term Investment Strategies by Jeremy J. Siegel

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asset allocation, backtesting, Black-Scholes formula, Bretton Woods, buy low sell high, California gold rush, capital asset pricing model, cognitive dissonance, compound rate of return, correlation coefficient, Daniel Kahneman / Amos Tversky, diversification, diversified portfolio, dividend-yielding stocks, equity premium, Eugene Fama: efficient market hypothesis, fixed income, German hyperinflation, implied volatility, index arbitrage, index fund, Isaac Newton, joint-stock company, Long Term Capital Management, loss aversion, market bubble, mental accounting, new economy, oil shock, passive investing, prediction markets, price anchoring, price stability, purchasing power parity, random walk, Richard Thaler, risk tolerance, risk/return, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, short selling, South Sea Bubble, technology bubble, The Great Moderation, The Wisdom of Crowds, transaction costs, tulip mania, Vanguard fund

PetroChina was created in 2000 to manage China’s domestic petroleum production. As of October 2007, its market value has soared to $438 billion, second in the world to Exxon Mobil. 2. OAO Gazprom (Russia) Gazprom, Russia’s largest company, is an oil and gas giant that controls 25 percent of the world oil reserves. Its revenues account for 25 percent of the Russian government’s tax revenues. Initially a state-owned natural gas monopoly, Gazprom was converted into a joint-stock company in CHAPTER 10 Global Investing and the Rise of China, India, and the Emerging Markets 183 1993. The state first had a 40 percent share, which was boosted to 51 percent in 2003. Gazprom offered 1 percent of its stock to foreigners in 1996. 3. Royal Dutch Shell (the Netherlands) The company known today as Royal Dutch Shell was formed from the merger of two global oil conglomerates in 2003—Royal Dutch Petroleum (founded by a Dutchman in 1890) and Shell Transport and Trading (founded by an Englishman in 1897)—that have been in a close relationship for over a century.

 

pages: 469 words: 146,487

Empire: How Britain Made the Modern World by Niall Ferguson

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British Empire, Cape to Cairo, colonial rule, Corn Laws, European colonialism, imperial preference, income per capita, John Harrison: Longitude, joint-stock company, Khartoum Gordon, Khyber Pass, land reform, land tenure, Livingstone, I presume, Mahatma Gandhi, night-watchman state, profit motive, Scramble for Africa, spice trade, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transatlantic slave trade, transatlantic slave trade, union organizing

It is true that a group of London-based merchants had already subscribed £30,000 to ‘set forthe a vyage … to the Est Indies and other ilandes and countries thereabout’ provided they could secure a royal monopoly; that in September 1600 Elizabeth I duly gave ‘The Company of Merchants of London trading into the East Indies’ a fifteen-year monopoly over East Indian trade; and that the following year their first fleet of four ships sailed for Sumatra. But Dutch merchants had been trading with India via the Cape of Good Hope since 1595. By 1596 they had firmly established themselves at Bantam, on the island of Java, from where the first consignments of Chinese tea destined for the European market were shipped in 1606. Moreover, their company was a permanent joint stock company, unlike the English company, which did not become permanent until 1650. Despite being founded two years after the English one, the Dutch company was swiftly able to dominate the lucrative spice trade with the Moluccan islands of Indonesia, once a Portuguese monopoly. The Dutch scale of business was simply bigger: they were able to send out nearly five times as many ships to Asia as the Portuguese and twice as many as the English.

 

pages: 515 words: 132,295

Makers and Takers: The Rise of Finance and the Fall of American Business by Rana Foroohar

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3D printing, accounting loophole / creative accounting, additive manufacturing, Airbnb, algorithmic trading, Asian financial crisis, asset allocation, bank run, Basel III, bonus culture, Bretton Woods, British Empire, call centre, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, centralized clearinghouse, clean water, collateralized debt obligation, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, crowdsourcing, David Graeber, deskilling, Detroit bankruptcy, diversification, Double Irish / Dutch Sandwich, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial deregulation, financial intermediation, Frederick Winslow Taylor, George Akerlof, gig economy, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, High speed trading, Home mortgage interest deduction, housing crisis, Howard Rheingold, Hyman Minsky, income inequality, index fund, interest rate derivative, interest rate swap, Internet of things, invisible hand, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, knowledge economy, labor-force participation, labour mobility, London Whale, Long Term Capital Management, manufacturing employment, market design, Martin Wolf, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, offshore financial centre, oil shock, passive investing, pensions crisis, Ponzi scheme, principal–agent problem, quantitative easing, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, Rana Plaza, RAND corporation, random walk, rent control, Robert Shiller, Robert Shiller, Ronald Reagan, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Snapchat, sovereign wealth fund, Steve Jobs, technology bubble, The Chicago School, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, Vanguard fund

By contrast, the big banks of today would be lucky to be able to cover 10 percent. That’s a direct result of the shift to limited liability banking, which began in the nineteenth century and continued well into the twentieth. Rich countries, hungry for capital to finance investment in railways, factories, and homes, decided to unleash the banking sector, by lifting regulation and allowing firms to operate not just as partnerships or joint stock companies in which each owner held ultimate responsibility for risk, but as limited liability entities in which no individual owner had to take responsibility if things went south. Instead, that duty fell to the government—and, ultimately, the taxpayers. At first banks themselves were skeptical about limited liability status. They thought of unlimited liability as a badge of honor, proof that they were secure institutions.

 

pages: 369 words: 120,636

Commuter City: How the Railways Shaped London by David Wragg

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Beeching cuts, British Empire, financial independence, joint-stock company, joint-stock limited liability company, Louis Blériot, North Sea oil, railway mania, South Sea Bubble, urban sprawl, V2 rocket, Winter of Discontent, yield management

The railways were not simply a means of transport for London; they were also a business and financial opportunity. The railways played an important part in the development of the British financial system, and it was their insatiable thirst for finance that placed great strains on the banking system, itself still to reach maturity, and which acted as a stimulus to the development of the stock market and the concept of the joint stock company and businesses that limited the liability of shareholders. The railways had an impact on London in other ways as well, for they had to be regulated and, strange as it may seem today when massive public subsidies are poured into the railways, they had to be taxed. Having a railway land on its doorstep was as big a godsend to a hard-pressed local authority in the nineteenth century as having a major airport would be today, but in the case of the railways, central government also saw its opportunity to raise revenue, and took it just as surely as in recent years it has begun to tax travellers by air.

 

pages: 456 words: 123,534

The Dawn of Innovation: The First American Industrial Revolution by Charles R. Morris

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air freight, British Empire, business process, California gold rush, clean water, colonial exploitation, computer age, Dava Sobel, en.wikipedia.org, glass ceiling, hiring and firing, if you build it, they will come, interchangeable parts, Isaac Newton, Jacquard loom, Jacquard loom, James Hargreaves, James Watt: steam engine, John Harrison: Longitude, joint-stock company, lone genius, manufacturing employment, new economy, New Urbanism, On the Economy of Machinery and Manufactures, purchasing power parity, QWERTY keyboard, refrigerator car, Robert Gordon, spinning jenny, Stephen Hawking, The Wealth of Nations by Adam Smith, trade route, transcontinental railway, traveling salesman

If that story is true, it seems vaguely dishonorable, and his friends may have been embarrassed when it was revealed what he had been up to. When Lowell returned to Boston, he set about organizing his Boston Manufacturing Company. Everything about it was bold. The War of 1812 was just underway, and Massachusetts mercantile houses were staring at economic disaster. (Lowell’s return ship, in fact, was taken by a British frigate, and he was briefly held in Nova Scotia.) It was created as a joint-stock company, an unusual form for the time, which preferred partnerships. The initial financing goal was enormous: $400,000, forty times more than the start-up investment in the first Brown-Almy-Slater spinning mill. But Lowell wanted to be absolutely sure of enough capital to carry the business through any reasonable early setbacks. His circular letter proposed an offering of one hundred shares, at $4,000 apiece, $1,000 of which would be paid at closing, with the remainder drawn from time to time as the company required.

 

pages: 461 words: 128,421

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street by Justin Fox

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Albert Einstein, Andrei Shleifer, asset allocation, asset-backed security, bank run, Benoit Mandelbrot, Black-Scholes formula, Bretton Woods, Brownian motion, capital asset pricing model, card file, Cass Sunstein, collateralized debt obligation, complexity theory, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, discovery of the americas, diversification, diversified portfolio, Edward Glaeser, endowment effect, Eugene Fama: efficient market hypothesis, experimental economics, financial innovation, Financial Instability Hypothesis, floating exchange rates, George Akerlof, Henri Poincaré, Hyman Minsky, implied volatility, impulse control, index arbitrage, index card, index fund, invisible hand, Isaac Newton, John Nash: game theory, John von Neumann, joint-stock company, Joseph Schumpeter, libertarian paternalism, linear programming, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, market bubble, market design, New Journalism, Nikolai Kondratiev, Paul Lévy, pension reform, performance metric, Ponzi scheme, prediction markets, pushing on a string, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Richard Thaler, risk/return, road to serfdom, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, shareholder value, Sharpe ratio, short selling, side project, Silicon Valley, South Sea Bubble, statistical model, The Chicago School, The Myth of the Rational Market, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, Thorstein Veblen, Tobin tax, transaction costs, tulip mania, value at risk, Vanguard fund, volatility smile, Yogi Berra

The first modern corporations were special cases, created by acts of parliament in the seventeenth-century Netherlands and United Kingdom to enable specific endeavors adjudged to promote the common good. That’s not always what they promoted. The South Sea Company collapsed in such a bubble of speculation in 1720 that the British parliament banned the creation of such entities—characterized by dispersed shareholders whose liability for the company’s debt was limited to the value of their shares. In 1776, Adam Smith argued that the “joint-stock company,” as the corporation was then known, had proved an unmitigated disaster. “The directors of such companies,…being the managers of other people’s money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own,” he wrote in the Wealth of Nations. “Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company.”1 During the industrial revolution that began just after Smith’s death, it became apparent that his analysis was off.

 

pages: 719 words: 209,224

The Dead Hand: The Untold Story of the Cold War Arms Race and Its Dangerous Legacy by David Hoffman

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anti-communist, banking crisis, Berlin Wall, crony capitalism, cuban missile crisis, failed state, joint-stock company, Mikhail Gorbachev, mutually assured destruction, nuclear winter, Robert Hanssen: Double agent, rolodex, Ronald Reagan, Ronald Reagan: Tear down this wall, Silicon Valley, Stanislav Petrov, Thomas L Friedman, uranium enrichment, Vladimir Vetrov: Farewell Dossier

Burrows and Robert Windrem, Critical Mass (New York: Simon & Schuster, 1994). Arzamas-16 was among the shareholders of Chetek. Dmitri Bogdanovich, Vlast, No. 102, Jan. 13, 1992. 28 The United States carried out 27 such explosions between 1961 and 1973. The Soviet Union carried out 124 between 1965 and 1988. 29 "Press Release, Ministry of Atomic Power and Industry, USSR, and International Joint Stock Company 'CHETEK,'" Dec. 11, 1991, in NRDC, "Report of the Third International Workshop," appendix F. 30 Mark Hibbs, "Soviet Firm to Offer Nuclear Explosives to Destroy Wastes," Nucleonics Week, Oct. 24, 1991, vol. 32, no. 43, p. 1. Fred Hiatt, "Russian Nuclear Scientists Seek Business, Food," Washington Post, Jan. 18, 1992, p. A1. 31 In a study of the impact of hypermilitarization on the Russian economy, Clifford G.

 

pages: 859 words: 204,092

When China Rules the World: The End of the Western World and the Rise of the Middle Kingdom by Martin Jacques

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Admiral Zheng, Asian financial crisis, Berlin Wall, Bretton Woods, BRICs, British Empire, credit crunch, Dava Sobel, deindustrialization, Deng Xiaoping, deskilling, discovery of the americas, Doha Development Round, energy security, European colonialism, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, global reserve currency, global supply chain, illegal immigration, income per capita, invention of gunpowder, James Watt: steam engine, joint-stock company, Kenneth Rogoff, land reform, land tenure, Malacca Straits, Martin Wolf, Naomi Klein, new economy, New Urbanism, open economy, pension reform, price stability, purchasing power parity, reserve currency, rising living standards, Ronald Reagan, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, spinning jenny, Spread Networks laid a new fibre optics cable between New York and Chicago, the scientific method, Thomas L Friedman, trade liberalization, urban planning, Washington Consensus, Xiaogang Anhui farmers

The scale of this military expenditure should not be underestimated. HMS Victory, commanded by Admiral Nelson during the Battle of Trafal gar in 1805, cost five times as much as Abraham Crowley’s steelworks, one of the flagship investments of Britain’s Industrial Revolution.19 Colonial trade also provided fertile ground for innovations in both company organization and systems of financing, with the Dutch, for example, inventing the joint-stock company for this purpose. Without the slave trade and colonization, Europe could never have made the kind of breakthrough it did. It is true that China also had colonies - newly acquired territories achieved by a process of imperial expansion from 1644 until the late eighteenth century - but these were in the interior of the Eurasian continent, bereft of either large arable lands or dense populations, and were unable to provide raw materials on anything like the scale of the New World.20 South-East Asia, which was abundant in resources, would have been a more likely candidate to play the role of China’s New World.

 

pages: 650 words: 203,191

After Tamerlane: The Global History of Empire Since 1405 by John Darwin

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agricultural Revolution, Atahualpa, Berlin Wall, Bretton Woods, British Empire, Cape to Cairo, colonial rule, Columbian Exchange, cuban missile crisis, deglobalization, deindustrialization, European colonialism, failed state, Francisco Pizarro, invisible hand, Isaac Newton, joint-stock company, Khartoum Gordon, laissez-faire capitalism, land reform, Mahatma Gandhi, Malacca Straits, mutually assured destruction, new economy, New Urbanism, oil shock, open economy, price mechanism, reserve currency, Ronald Reagan, Scramble for Africa, South China Sea, South Sea Bubble, spice trade, The Wealth of Nations by Adam Smith, trade route, transaction costs, transatlantic slave trade

He made his name first in the elephant trade – the dangerous business of bringing elephants by sea across the bay to India – before becoming the king’s chief commercial agent.158 But most European traders were company men. The high costs of long-distance trade, as well as large armed ships (the ‘East Indiamen’), shore establishments (with their garrisons to guard against attack by other Europeans or disorderly locals) and the diplomatic apparatus required for dealings with regional rulers and the Mughal court, had long made it necessary for European traders to be organized as joint-stock companies. These were forerunners of the modern corporation (with shareholders, a board and a management structure), and enjoyed a monopoly in the direct trade between their country and India. But their superficial modernity did not, of course, mean that European merchants were heralds of the open economy or the rule of the market. Indeed, they had little to sell, and they were forced to import bullion on a massive scale to pay for the Indian goods that they wanted to buy.

 

pages: 741 words: 179,454

Extreme Money: Masters of the Universe and the Cult of Risk by Satyajit Das

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affirmative action, Albert Einstein, algorithmic trading, Andy Kessler, Asian financial crisis, asset allocation, asset-backed security, bank run, banking crisis, banks create money, Basel III, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Bonfire of the Vanities, bonus culture, Bretton Woods, BRICs, British Empire, capital asset pricing model, Carmen Reinhart, carried interest, Celtic Tiger, clean water, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, debt deflation, Deng Xiaoping, deskilling, discrete time, diversification, diversified portfolio, Doomsday Clock, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, eurozone crisis, Fall of the Berlin Wall, financial independence, financial innovation, fixed income, full employment, global reserve currency, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, happiness index / gross national happiness, haute cuisine, high net worth, Hyman Minsky, index fund, interest rate swap, invention of the wheel, invisible hand, Isaac Newton, job automation, Johann Wolfgang von Goethe, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Kevin Kelly, labour market flexibility, laissez-faire capitalism, load shedding, locking in a profit, Long Term Capital Management, Louis Bachelier, margin call, market bubble, market fundamentalism, Marshall McLuhan, Martin Wolf, merger arbitrage, Mikhail Gorbachev, Milgram experiment, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Naomi Klein, Network effects, new economy, Nick Leeson, Nixon shock, Northern Rock, nuclear winter, oil shock, Own Your Own Home, pets.com, Plutocrats, plutocrats, Ponzi scheme, price anchoring, price stability, profit maximization, quantitative easing, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Ray Kurzweil, regulatory arbitrage, rent control, rent-seeking, reserve currency, Richard Feynman, Richard Feynman, Richard Thaler, risk-adjusted returns, risk/return, road to serfdom, Robert Shiller, Robert Shiller, Rod Stewart played at Stephen Schwarzman birthday party, rolodex, Ronald Reagan, Ronald Reagan: Tear down this wall, savings glut, shareholder value, Sharpe ratio, short selling, Silicon Valley, six sigma, Slavoj Žižek, South Sea Bubble, special economic zone, statistical model, Stephen Hawking, Steve Jobs, The Chicago School, The Great Moderation, the market place, the medium is the message, The Myth of the Rational Market, The Nature of the Firm, The Predators' Ball, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, trickle-down economics, Turing test, Upton Sinclair, value at risk, Yogi Berra, zero-coupon bond

In 1696, concerned about the exploitation of credulous investors, England’s Commissioners of Trade wrote that shares were being sold “to ignorant men, drawn in by the reputation, falsely raised and artfully spread, concerning the state of [the company].”3 Formed in 1710 to carry on trade with Spain’s colonies in South America, the South Sea Company promised investors great profits. The stock increased by more than 900 percent. But in 1720, the stock price collapsed as shareholders tried to sell their shares, realizing that the company was worthless. The English Parliament enacted the 1720 Bubble Act, outlawing the creation of all joint stock companies not authorized by royal charter. In 1825, the need to raise capital to finance industry led to the Act’s repeal. A Brilliant Daring Speculation Originally, companies were floated to raise funds for speculative projects—railways, canals, new inventions, and mining ventures (usually the latest “gold rush”). During the Internet bubble in the 1990s, companies desperately sought to stick virtual claim pegs into the new frontier of cyberspace.

 

pages: 686 words: 201,972

Drink: A Cultural History of Alcohol by Iain Gately

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barriers to entry, British Empire, California gold rush, delayed gratification, Deng Xiaoping, Edward Lloyd's coffeehouse, Fellow of the Royal Society, Gordon Gekko, greed is good, Haight Ashbury, Hernando de Soto, imperial preference, invisible hand, joint-stock company, Louis Pasteur, megacity, music of the spheres, Peace of Westphalia, refrigerator car, Ronald Reagan, South Sea Bubble, spice trade, strikebreaker, the scientific method, Tim Cook: Apple, trade route, traveling salesman, Upton Sinclair, V2 rocket, working poor

This redoubt of Mediterranean culture had developed in a kind of splendid isolation, and its inhabitants had evolved a unique society, whose mores, dress codes, and drinking habits were utterly different from those of their neighbors upriver. Founded in 1718 by Jean-Baptiste Le Moyne, Sieur de Bienville, New Orleans was intended to be the principal port and first city of the French province of Louisiana. Some forty-odd years after this territory had been explored and claimed for France, it was decided to establish a colony there to exploit the gold mines and pearl fisheries it certainly must possess. A joint stock company was formed, colonists were collected from the houses of correction in Paris, and a small fleet was sent to settle an area several times larger than France itself. While Parisian financiers sat back and waited for their investments to bear fruit, their colonists ran into trouble. There was no gold, the pearls were bad, and the local Indians were belligerent, had acquired immunity to many European diseases, and had learned to use guns.

 

pages: 798 words: 240,182

The Transhumanist Reader by Max More, Natasha Vita-More

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23andMe, Any sufficiently advanced technology is indistinguishable from magic, artificial general intelligence, augmented reality, Bill Joy: nanobots, bioinformatics, brain emulation, Buckminster Fuller, cellular automata, clean water, cloud computing, cognitive bias, cognitive dissonance, combinatorial explosion, conceptual framework, Conway's Game of Life, cosmological principle, data acquisition, discovery of DNA, Drosophila, en.wikipedia.org, experimental subject, Extropian, fault tolerance, Flynn Effect, Francis Fukuyama: the end of history, Frank Gehry, friendly AI, game design, germ theory of disease, hypertext link, impulse control, index fund, John von Neumann, joint-stock company, Kevin Kelly, Law of Accelerating Returns, life extension, Louis Pasteur, Menlo Park, meta analysis, meta-analysis, moral hazard, Network effects, Norbert Wiener, P = NP, pattern recognition, phenotype, positional goods, prediction markets, presumed consent, Ray Kurzweil, reversible computing, RFID, Richard Feynman, Ronald Reagan, silicon-based life, Singularitarianism, stem cell, stochastic process, superintelligent machines, supply-chain management, supply-chain management software, technological singularity, Ted Nelson, telepresence, telepresence robot, telerobotics, the built environment, The Coming Technological Singularity, the scientific method, The Wisdom of Crowds, transaction costs, Turing machine, Turing test, Upton Sinclair, Vernor Vinge, Von Neumann architecture, Whole Earth Review, women in the workforce

Ideally, there would be a “complete market,” with assets contingent on every possible state of the world. In reality markets are not complete, and various sorts of “market failure” are traced to this fact. Incompleteness is usually (Hirshleifer 1971) explained as due to judging difficulties, finite transaction costs, and market thinness. In fact, these authors are often unaware that such markets are almost universally prohibited by anti-gambling laws, as joint-stock companies, life insurance, and commodity futures (Rose 1986) were prohibited before special interests managed to obtain exemptions. Though unevenly enforced, such laws prohibit public science bets between strangers in all of the US and in most of the world. Only Great Britain, to my knowledge, allows such bets, and then only for the last three decades. English bookmakers perceive little demand for science bets, and so take them mainly to induce popular articles mentioning the going odds on unusual subjects (Sharpe 1990).

 

pages: 662 words: 180,546

Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown by Philip Mirowski

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Andrei Shleifer, asset-backed security, bank run, barriers to entry, Basel III, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Swan, blue-collar work, Bretton Woods, Brownian motion, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, constrained optimization, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, dark matter, David Brooks, David Graeber, debt deflation, deindustrialization, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, facts on the ground, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, full employment, George Akerlof, Goldman Sachs: Vampire Squid, Hernando de Soto, housing crisis, Hyman Minsky, illegal immigration, income inequality, incomplete markets, invisible hand, Jean Tirole, joint-stock company, Kenneth Rogoff, knowledge economy, l'esprit de l'escalier, labor-force participation, liquidity trap, loose coupling, manufacturing employment, market clearing, market design, market fundamentalism, Martin Wolf, Mont Pelerin Society, moral hazard, mortgage debt, Naomi Klein, Nash equilibrium, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, oil shock, payday loans, Ponzi scheme, precariat, prediction markets, price mechanism, profit motive, quantitative easing, race to the bottom, random walk, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, school choice, sealed-bid auction, Silicon Valley, South Sea Bubble, Steven Levy, technoutopianism, The Chicago School, The Great Moderation, the map is not the territory, The Myth of the Rational Market, the scientific method, The Wisdom of Crowds, theory of mind, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, Tobin tax, too big to fail, transaction costs, War on Poverty, Washington Consensus, We are the 99%, working poor

This particular neoliberal precept dictates that the widely noted exacerbation of income inequality in the United States since 1980 cannot possibly have played a role in precipitating the crisis in any way.101 Indeed, attempts by the state to offset or ameliorate the trend toward inequality of wealth—especially through attempts to expand home ownership and consumer credit—become themselves, for neoliberals, major root causes of the crisis.102 This then gets translated into the preferred neoliberal story of the crisis, which attributes culpability to the Democrats by lodging blame for the housing bubble via securitization with Fannie Mae and Freddie Mac (see chapter 5). [10] Corporations can do no wrong, or at least they are not to be blamed if they do. This is one of the stronger areas of divergence from classical liberalism, with its ingrained suspicion of power concentrated in joint stock companies and monopoly stretching from Adam Smith to Henry Simons. The MPS set out in the 1950s entertaining suspicions of corporate power, with the ordoliberals especially concerned with the promotion of strong antitrust capacity on the part of the state. But starting with the Chicago law and economics movement, and then progressively spreading to treatments of entrepreneurs and the “markets for innovation,” neoliberals began to argue consistently that not only was monopoly not harmful to the operation of the market, but an epiphenomenon attributable to the misguided activities of the state and powerful interest groups.103 The twentieth-century socialist contention that capitalism bore within itself the seeds of its own arteriosclerosis (if not self-destruction) was baldly denied.

 

pages: 343 words: 41,228

Memoirs of Extraordinary Popular Delusions and the Madness of Crowds - the Original Classic Edition by Charles MacKay

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clean water, invention of gunpowder, invisible hand, joint-stock company, railway mania, South Sea Bubble, the market place

These resolutions answering the end designed, the directors, to improve the infatuation of the monied men, opened their books for a second subscription of a million, at four hundred per cent. Such was the frantic eagerness of 13/10/2008 17:33 Printable format for Mackay, Charles, Memoirs of Extraordinary Popular ... 5 of 21 http://www.econlib.org/cgi-bin/printarticle.pl people of every class to speculate in these funds, that in the course of a few hours no less than a million and a half was subscribed at that rate. 2.15 2.16 2.17 In the mean time, innumerable joint-stock companies started up everywhere. They soon received the name of Bubbles, the most appropriate that imagination could devise. The populace are often most happy in the nicknames they employ. None could be more apt than that of Bubbles. Some of them lasted for a week, or a fortnight, and were no more heard of, while others could not even live out that short span of existence. Every evening produced new schemes, and every morning new projects.

 

pages: 965 words: 267,053

A History of Zionism by Walter Laqueur

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Albert Einstein, anti-communist, British Empire, illegal immigration, joint-stock company, land reform, Mahatma Gandhi, means of production, new economy, Plutocrats, plutocrats, profit motive, strikebreaker, the market place, éminence grise

Herzl envisaged the establishment of two agencies to initiate and supervise the building up of the country: the ‘Society of Jews’, which would provide a scientific plan and political guidance, and the ‘Jewish Company’, modelled on the lines of the great trading associations, which would carry them out, wind up the affairs of the emigrants, and organise trade and commerce in the new country. The Jewish Company would be a joint stock company, framed according to English law, with its principal centre in London and a capital of approximately £50 million. At the very beginning of his book Herzl stated that he did not intend to depict another agreeable Utopia, but that he was interested in the central idea of a Jewish state which he wanted to submit to discussion. He did not want to prepare (as other writers of Utopias had done) a complicated scheme with many cogs and wheels.

 

pages: 964 words: 296,182

Karl Marx: Greatness and Illusion by Gareth Stedman Jones

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anti-communist, battle of ideas, Berlin Wall, British Empire, colonial rule, Corn Laws, deindustrialization, Fall of the Berlin Wall, feminist movement, joint-stock company, land reform, land tenure, means of production, New Journalism, New Urbanism, night-watchman state, On the Economy of Machinery and Manufactures, The Wealth of Nations by Adam Smith, trade liberalization, unemployed young men, wage slave

He had been careful to ensure that the political constitution of the Empire left all the essential mechanisms of absolutism in place, including crown control of the army and bureaucracy, the absence of ministerial responsibility to the Reichstag, the retention of the three-class suffrage in Prussia, and Prussian domination of the federal system through the Bundestag. But he also incorporated into its economic foundations all the leading demands of the liberals: above all free trade together with freedom of movement, the end of the usury laws, and the abolition of guild regulation and of state regulation of joint-stock companies. Liberals were opposed to universal suffrage, but their identification with Bismarck’s Kulturkampf (the legislative attack on German Catholics) found support among many Social Democrats. In particular, Social Democrats could identify with the promotion of secular education, centralization and rationalism over clericalism, particularism, ultramontanism and ‘medieval’ superstition. Liberals themselves still hoped that an alliance with Bismarck against Reichsfeinde (enemies of the Reich) might result in a constitutional state.

 

pages: 1,178 words: 388,227

Quicksilver by Neal Stephenson

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Danny Hillis, dark matter, en.wikipedia.org, Eratosthenes, Fellow of the Royal Society, Isaac Newton, joint-stock company, out of africa, Peace of Westphalia, retrograde motion, short selling, the scientific method, trade route, urban planning

In a strange way it reminded him of the ‘Change in London, except that where the ‘Change was a daytime place, all a-sparkle with Thomas Gresham’s golden grasshoppers and vaulting Mercurys, and crowded with lusty shouting traders, this place was Gothickal in the extreme, faintly dusted with the blue light of a half-moon, sparsely populated by robed and/or big-wigged men skulking about the paths and huddling in doorways in groups of two or three. And whereas the ‘Change-men made common cause to buy shares in sailing-ships or joint stock companies, and traded Jamaica sugar for Spanish silver, these men were transacting diverse small conspiracies or trading snatches of courtly data. The coming of Court to Cambridge was like Stourbridge Fair—an occasional opportunity for certain types of business, most of which was in some sense occult. He couldn’t get in any trouble simply walking direct across the Great Court to the Gate. As a Fellow, he was allowed to tread on the grass.

 

pages: 1,199 words: 384,780

The system of the world by Neal Stephenson

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bank run, British Empire, cellular automata, Edmond Halley, Fellow of the Royal Society, high net worth, Isaac Newton, James Watt: steam engine, joint-stock company, large denomination, place-making, the market place, trade route, transatlantic slave trade

Without capital, Mr. Newcomen’s engine will remain nothing more than a curiosity that fills my cistern. The mines shall remain inundated. Neither copper nor tin shall come out of them, and this Court shall lose standing, and have no business to transact. On the other hand, if there is some interest among you Gentlemen of Devon—to speak plainly, if a few of you would care to purchase shares in the joint stock company known as the Proprietors of the Engine for Raising Water by Fire—why, then, the bleak situation I have just described is overturned, you shall have purchased a Revolution, and this Court will be a busy one indeed, with little choice but to adjourn to that merry Inn down the road—where, by the way, the first two rounds of drinks will be paid for by your humble and obedient servant.” The Saracen’s Head THAT EVENING “NOW YOU WILL BE a Tory, in the eyes of certain Whigs,” Will warned him, “and a butt for all the envenomed Darts of Party Malice.”

 

pages: 1,336 words: 415,037

The Snowball: Warren Buffett and the Business of Life by Alice Schroeder

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affirmative action, Albert Einstein, anti-communist, Ayatollah Khomeini, barriers to entry, Bonfire of the Vanities, Brownian motion, capital asset pricing model, card file, centralized clearinghouse, collateralized debt obligation, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, desegregation, Donald Trump, Eugene Fama: efficient market hypothesis, global village, Golden Gate Park, Haight Ashbury, haute cuisine, Honoré de Balzac, If something cannot go on forever, it will stop, In Cold Blood by Truman Capote, index fund, indoor plumbing, interest rate swap, invisible hand, Isaac Newton, Jeff Bezos, joint-stock company, joint-stock limited liability company, Long Term Capital Management, Louis Bachelier, margin call, market bubble, Marshall McLuhan, medical malpractice, merger arbitrage, Mikhail Gorbachev, moral hazard, NetJets, new economy, New Journalism, North Sea oil, paper trading, passive investing, pets.com, Plutocrats, plutocrats, Ponzi scheme, Ralph Nader, random walk, Ronald Reagan, Scientific racism, shareholder value, short selling, side project, Silicon Valley, Steve Ballmer, Steve Jobs, supply-chain management, telemarketer, The Predators' Ball, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, transcontinental railway, Upton Sinclair, War on Poverty, Works Progress Administration, Y2K, zero-coupon bond

Maidenberg, “Big Board Ends Ban on Williston, Walston and Merrill Lynch Are Instrumental in the Broker’s Reinstatement, Haupt Remains Shut, Effect of Move Is Swept Aside by Assassination of President Kennedy,” November 24, 1963. The soybean-oil drama, including the American Express role, peaked during a period of about a week following the assassination. 45. American Express at the time was the only major U.S. public company to be capitalized as a joint stock company rather than a limited liability corporation. This meant its shareholders could be assessed for deficiencies in capital. “So every trust department in the United States panicked,” recalls Buffett. “I remember the Continental Bank held over 5 percent of the company, and all of a sudden not only do they see that the trust accounts were going to have stock worth zero, but they could get assessed.

 

pages: 1,445 words: 469,426

The Prize: The Epic Quest for Oil, Money & Power by Daniel Yergin

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anti-communist, Ayatollah Khomeini, bank run, Berlin Wall, British Empire, colonial exploitation, Columbine, cuban missile crisis, energy security, European colonialism, Exxon Valdez, financial independence, fudge factor, informal economy, joint-stock company, land reform, megacity, Mikhail Gorbachev, Monroe Doctrine, new economy, North Sea oil, oil rush, oil shale / tar sands, oil shock, postnationalism / post nation state, price stability, RAND corporation, rent-seeking, Ronald Reagan, shareholder value, Thomas Malthus, Yom Kippur War

It was estimated that refining capacity was three times greater than the market's needs. The costs of overcapacity were obvious to Rockefeller, and it was in these circumstances, with most refiners losing money, that he launched his effort to consolidate the industry in his own grasp. He and Flagler wanted to bring in more capital, but without jeopardizing control. The technique they used was to turn their partnership into a joint stock company. On January 10, 1870, five men, led by Rockefeller and Flagler, established the Standard Oil Company. The name was chosen to indicate a "standard quality of product" on which the consumer could depend. At the time, kerosene of widely varying quality was sold. If the kerosene contained too much flammable gasoline or naphtha, as sometimes happened, the purchaser's attempt to light it could be his last act on this earth.