The David Gordon Memorial Lecture: Finance without Financiers: Prospects for Radical Change In Financial Governance
In response to the financial crisis of 2007-20I0, governments in the United States, Europe, and elsewhere have invested billions of dollars in financial institutions to prevent them from going bankrupt and from further disrupting the global economy. Despite these massive public bail-outs, a government and "elite" consensus has emerged that these nationalized or quasi- nationalized financial institutions should be privatized as soon as possible, and that, apart from modest changes in financial regulation, our economies should return to the status quo ante financial structure. I disagree. As the crisis reveals, "financier" dominated finance has a number of devastating flaws: it creates major externalities that contribute to financial and real economic instability; it promotes short-term investment strategies; it contributes to inequality; and it undermines economic efficiency and the achievement of social goals in the real economy. I argue that a better strategy for achieving economic recovery, restructuring, and widely shared, sustainable prosperity is to use public investments in the financial sector to build on the successful post-World War II experiences of publicly oriented financial institutions to create a stronger presence of "finance without financiers."
When requesting a correction, please mention this item's handle: RePEc:sae:reorpe:v:42:y:2010:i:3:p:293-306. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publishing)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.