Re: A highly critical take on Fitch
Nathan Newman wrote:
Yes, the lack of direct bank ownership of equities in the 20th century made US corporate structures different from much of the world, but one of the results was precisely the mega-corporate structures where firms didn’t even need much capital from the markets since they could raise it internally– a point I believe a certain Doug Henwood has emphasized in questioning the centrality others have given to the role of Wall Street.
The fundraising role of Wall Street is exaggerated; its real function is the organization of ownership and disciplining management. I’ve got a paper around somewhere that points out that dispersed ownership, as in the predominantly English-speaking countries, is a more hostile environment for social democracy, since it’s pitiless in its demands for cost-cutting and labor flexibility. Ownership in the soc dem countries is more concentrated. The comparison works for Canada and the US; Canada is both more concentrated and more social democratic.
Doug