A Quote by Edmund Phelps
Capitalist systems function less well without state protection of investors, lenders, and companies against monopoly, deception, and fraud.
Related Quotes
Our main conclusions about the state are that a minimal state, limited, to the narrow functions of protection against force, theft, fraud, enforcement of contracts, and so on, is justified, but any more extensive state will violate persons' rights not to be forced to do certain things, and is unjustified; and that the minimal state is inspiring as well as right.
Lenders, including major credit companies as well as payday lenders, have taken over the traditional role of the street-corner loan shark, charging the poor insanely high rates of interest.
The essential function of the State is to maintain peace, justice, law, and order, and to protect the individual citizen against aggression, violence, theft, and fraud.
Governments can and do expropriate investors or discriminate against them. Domestic judicial and administrative systems provide investors with one option for protecting themselves.
Well, you probably will always believe there should be laws against fraud, and I don't think there is any need for a law against fraud.
While I'm a venture capitalist who invests in early-stage tech companies, I often feel like a professional emailer and conference call maker. I try to spend most of my time doing whatever the companies we are investors in need me to do.
Ultimately, the success of America's market economy depends on trust. This includes trust between buyers and sellers, between lenders and borrowers, and between investors and the companies in which they invest.
So long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.
Companies typically borrow money at less than their return on equity and therefore compound their return at the expense of lenders.
To create conditions in which competition will be as effective as possible, to prevent fraud and deception, to break up monopolies- these tasks provide a wide and unquestioned field for state activity.
My family achieved success not in spite of, but because of the American system of taxation. After all, without reliable and safe roads there’d have been no Disneyland; without high functioning legal systems and a well regulated business environment there would have been no copyright protection for Mickey Mouse.
Energy in the executive is a leading character in the definition of good government. It is essential to the protection of the community against foreign attacks; it is not less essential to the steady administration of the laws; to the protection of property against those irregular and high-handed combinations which sometimes interrupt the ordinary course of justice; to the security of liberty against the enterprises and assaults of ambition, of faction, and of anarchy.
It is impossible to find a single example of a monopoly that has ever existed without official protection.
With joint-stock corporations, investors can place bets on the success of many different companies, without having to play a central management role in any one of them. This allows investors to diversify their financial holdings. It also allows them to capture profits on their investments, without having to get involved in the dirty, troublesome business of actually running a company.
Value investors will not invest in businesses that they cannot readily understand or ones they find excessively risky. Hence few value investors will own the shares of technology companies. Many also shun commercial banks, which they consider to have unanalyzable assets, as well as property and casualty insurance companies, which have both unanalyzable assets and liabilities.
Before the CFPB, there was no single agency or entity within the federal government tasked with protecting Americans from predatory or negligent practices of banks, credit card companies, mortgage lenders, payday lenders, credit rating agencies and other financial service businesses.
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