From: smee@bristol.ac.uk (Paul Smee)
Newsgroups: soc.culture.british
Subject: Re: Currency Problems
Date: 2 Oct 92 17:44:10 GMT
Reply-To: P.Smee@bristol.ac.uk (Paul Smee)
Organization: University of Bristol

In article <qihnmls@zola.esd.sgi.com> livesey@solntze.esd.sgi.com (Jon Livesey) writes:
>In article <1992Oct1.171112.17766@bristol.ac.uk>, smee@bristol.ac.uk (Paul Smee) writes:
>>
>> The short-range view of British investors, I would claim, is a direct
>> result of the commercial environment created by the 'crazy schemes' of
>> the Tory party.  Companies can't afford to invest in long-term
>> research.  It makes their percentage return on capital look bad,
>> depresses their stock value by making it less interesting to
>> quick-turnover market speculators, and renders them vulnerable to
>> takeover and asset-stripping.  The market (which I do feel is useful in
>> concept) has gone mad, and the only defense available to companies is
>> to make sure that their short-term, 'right now' profit stays high.
>
>And what are the alternatives here?   Let investors see the 
>effects of good and bad management, and move their investment 
>around accordingly?
>
>Or take decision-making away from investors, and take companies
>under government management?

As I've said (or at least strongly implied) elsewhere, it depends.  If
you are referring to companies working in markets where real
competition exists, or to companies holding monopoly positions in
product areas which can't be considered necessities, I'm happy to let
the market do it.

Though it is obvious to me, from seeing the effects of successive
deregulations, that SOME form of action is needed so that the market
doesn't penalise companies which look towards the future.  One
possibility (just as a free example, not as the only solution; maybe
not even the best solution, since it's totally off the top of my head)
would be, e.g., capital-gains tax rates set on a sliding scale, such
that the longer you've held the investment, the lower the tax rate on
the gains.  I.e. if people want to distort the market by 'churning' it,
let them pay some of the social costs of it -- or 'externals', if you
want to stick to economic jargon.

If, on the other hand, the company is intrinsically a monopoly, and is
providing necessities of life, then, for reasons I've laid out
elsewhere, yes, I think 'society' (by which I mean, in this case,
'government' as its agent) should be the provider.  

Finally (though I come dangerously close to agreeing with Simon here),
the government ought to be involved at least at the infrastructure-
planning (and in some cases, infrastructure-provision) level, for
groups of 'products' where wide-area planning is desireable, and where
the 'product' needs, for reasons of national interest, to extend to
areas which might not individually be commercially interesting.
'Transportation' is one such 'product'.  This will almost certainly
involve them spending some money on it, sometimes as seed-capital on
which they'll expect a return, sometimes as pure expenditure.  

(And, yes, I know that it's really MY money.  I know that, in a free
market, I could organise together with a bunch of other people who felt
that way, and we could get together and form an organisation whose
mission was, say, to organise a sensible integrated transport system,
and we could give it our money to do that with.  Indeed, I *thought*
that's what we had done.  I *thought* that's why we invented 'government' 
in the first place.)

-- 
Paul Smee, Computing Service, University of Bristol, Bristol BS8 1UD, UK
 P.Smee@bristol.ac.uk - ..!uunet!uknet!bsmail!p.smee - Tel +44 272 303132
Newsgroups: soc.culture.british