Re: [OPE] How finance explains equity to itself

Thanks for the quote, Jurriaan.

This apology for exploitation is mixing up a risk premium on loans
with equity capital.

David Ellerman is particularly good on this aspect of capitalist
ideology; see especially:
http://www.ellerman.org/Davids-Stuff/Books/p&c.htm
and
http://www.ellerman.org/Davids-Stuff/Books/demofirm.doc

McKinsey is quite right to identify equity-capital as the key property
claim that the capitalist class enjoys. They are "not going to give it
up" since it is the economic basis of their social power.

For social progress this particular type of property claim, along with
the related concept of the wage, must be abolished.

-Ian.

On Mon, Dec 29, 2008 at 1:17 PM, Jurriaan Bendien <adsl675281@tiscali.nl> wrote:
> "The essence of capitalism is capitalizing—bringing forward the future value
> of cash to the present so that society can grow more quickly by taking
> risks. It goes back to the Dutchmen in the 16th century, sitting at their
> coffeehouses in Amsterdam and Leiden, loaning each other money for a
> guaranteed return. Someone said, "I'll give you a little higher return if
> you give me a piece of the action"—and equity was invented. That had the
> effect of bringing forward, into real cash today, the net present value of
> future earnings. That levered society and allowed it to grow at a much
> higher rate than it would otherwise have. Equity was a very clever
> invention, and we are not going to give it up. This is the way people are.
> This is the way commerce works and will continue to work unless capitalism
> ends. And that won't happen, regardless of what you read in the press."
> http://www.mckinseyquarterly.com/Strategy/Growth/Creative_destruction_and_the_financial_crisis_An_interview_with_Richard_Foster_2268
> When I'm ridin' round the world
> and I'm doin' this and I'm signing that
> and I'm tryin' to make some girl
> who tells me baby better come back later next week
> 'cause you see I'm on losing streak.
> I can't get no, oh no no no.
> Hey hey hey, that's what I say.
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Received on Mon Dec 29 17:50:58 2008