Abstract

http://ssrn.com/abstract=442701
 
 

Citations (1)



 
 

Footnotes (2)



 


 



The Debasement of Contracts and the Decline of Capital Markets


Michael C. Jensen


Social Science Electronic Publishing (SSEP), Inc.; Harvard Business School; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)


THE WORLD CAPITAL SHORTAGE, Alan Heslop, ed., The Bobbs-Merrill Company Inc., Indianapolis, Indiana, 1977

Abstract:     
The basic problem in the conflict between political democrary and free markets is the following: individuals, you and I, can make ourselves and our families better off in two major ways: (1) By expending time and other resources operating in the private sector to produce goods and services (be they art, automobiles, film, or education) which other people wish to buy. (2) By expending our resources in the political sector to get the government to change the rules of the game to reallocate wealth from others in society to ourselves. In the first of these activities we generally make other people better off and in the second, we make them worse off: We make them worse off for two reasons: (1) The direct effects of the wealth transfers, and (2) The indirect effects caused by the reduced incentive to produce—examples include income taxes, restrictions on production such as our former farm programs and licensing restrictions on entry into various professions or markets, and the attenuation of property rights caused by significantly increased uncertainty over what will be the future rules of the game.

Number of Pages in PDF File: 20

Keywords: Political Economy, politics, markets, free enterprise

Accepted Paper Series





Download This Paper

Date posted: November 30, 2003  

Suggested Citation

Jensen, Michael C., The Debasement of Contracts and the Decline of Capital Markets. THE WORLD CAPITAL SHORTAGE, Alan Heslop, ed., The Bobbs-Merrill Company Inc., Indianapolis, Indiana, 1977. Available at SSRN: http://ssrn.com/abstract=442701 or http://dx.doi.org/10.2139/ssrn.442701

Contact Information

Michael C. Jensen (Contact Author)
Social Science Electronic Publishing (SSEP), Inc. ( email )
7858 Sanderling Road
Sarasota, FL 34242
United States
617-510-3363 (Phone)
305 675-3166 (Fax)
HOME PAGE: http://ssrn.com/author=9

Harvard Business School ( email )
Soldiers Field
Negotiations, Organizations & Markets
Boston, MA 02163
United States
617-510-3363 (Phone)
305-675-3166 (Fax)
HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=ovr&facId=6484
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
European Corporate Governance Institute (ECGI) ( email )
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
Feedback to SSRN


Paper statistics
Abstract Views: 3,053
Downloads: 264
Download Rank: 67,738
Citations:  1
Footnotes:  2

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo6 in 0.406 seconds