mikhail

More regulation will harm, not help, recovery | Gerard Baker - Times Online

Im really worried people will see the current problems as a failure of capitalism.Dont forget who brought you to the party.

The over reaction is more damaging than anything.

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The third-rate mind is only happy when it is thinking with the majority. The second-rate mind is only happy when it is thinking with the minority. The first-rate mind is only happy when it is thinking.

Scucca

Its a natural part of capitalism. I'd be more worried if the libertarians realised their error. Freebee socialist foot soldiers aren't common on the ground

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mikhail

Well maybe you can shed some light on my thoughts it seems to me large companies like well most companies eventually become mismanaged and un innovated dinosaurs and go under which is fine because there place is taking by better companies.However banks dont seem to work the same way so is the problem with banks not capitalism in general?

Scucca

I'm not sure about that. I deal mainly with SMEs, but I'd suggest that the expiration of large companies is relatively small. Market concentration allows for management error (Indeed, we'd expect mismanagement simply because of the principal-agent problem). Have you got any data/analysis on the destruction of companies?

There is the stuff on creative destruction. However, that stuff suggests innovation will become routinized, bureaucratized and relatively uncomplicated (the stuff of large companies)

The financial sector certainly stands out. Neoliberalism, for example, can only be understood by referring to how a financial class is created that feeds off the opportunities presented by instability. Crisis therefore is more likely by the selfish pursuit of profit. This should ensure more protection of the sector, given spillovers threaten the rest of the economy