French President Nicolas Sarkozy is probably the leading proponent among supposedly free market politicians, of vigorous state intervention in the markets wherever and whenever things do not seem quite “right” to him. In particular Sarkozy has sought to demonise “commodity speculation”, conjuring up images of sharp suited spivs manipulating the price of agri-commodities such as wheat to the detriment of honest French farmers.
For the last of these three blogs on Hayek (last for now, anyway) I want to look at his suggestions for a practical implementation of his ideal form of minimal government. As with the previous blogs, it is worthwhile to set this against our present context of a huge upsurge in state intervention in the markets, via quantitative easing and re-regulation.
During the recent World Economic Forum in Switzerland, India made a concerted effort to present itself as an attractive destination for foreign director investors. Indeed, on the closing night of the Davos event, the Confederation of Indian Industry hosted a themed “Bollywood Night” for visiting dignitaries and CEOs.
On the face of things it might seem odd that the Austrian School, in the shape of Friedrich Hayek and Ludwig Von Mises should be back in the spotlight, if not yet back in fashion, as people search around for a replacement to classical economics.
Vast quantities of hot air and newsprint have been expended by British politicians and media on how to reform the banking sector, make it more customer-centric and less capable of being "bilked" by bonus-hungry executive teams.
It is now widely believed that the 2008-09 global crash discredited the classical economic model of efficient markets beyond repair and that what is needed is a new vision. In fact the financier George Soros believes this so strongly that he has almost single-handedly funded a new body, The Institute for New Economic Thinking, or iNet, the governing board of which includes the Nobel Laureate economist Joseph Stiglitz.
Bringing to you the top finance and business news stories of the week. This week, Obama's State of the Union address and the politics behind the price of cocoa.
Truth is an emotion applied to a set of facts. President Obama stated early in his State of the Union speech: “Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again”.
In part one I looked at the argument that BP’s superior governance and more developed corporate social responsibility could keep its Russian joint venture partner, Rosneft, on the straight and narrow as far as taking an “environmentally sound” approach to drilling for oil in the Arctic is concerned. In part two, I look at environmental concerns and Russia’s track record on this front.
At QFINANCE we are always interested in major mergers and joint ventures so the BP-Rosneft deal announced on January 14 is a natural focus, particularly since it throws such a bright light on the issue of corporate governance. This issue has yet to unfold in its full glory, so to speak, but the constituent elements are fascinating from the outset.