RE: principal/agent and social conscience

[mcclintockbrent%faculty%Carthage]

A reply to Bob Pollin's condescending comment on my "anecdote on Germany"'s 
banker capitalism:

I guess I was a mite too subtle. Let be more direct. It is not clear from 
Bob's posts _how_ Bank-based financial systems are organizationally more 
efficient than the alternatives (American system of corporate control?) nor 
how the "more efficient" principal/agent relationships in such systems 
generate _improved private outcomes_ (for capitalists, managers, workers, 
consumers) as well as _social outcomes_. 

As for Bob's references to "a huge literature on comparative financial 
systems, much of it good", such comments hardly enlighten the discussion -- 
probably less so than "anecdotes". _What_ precisely is good about much of 
this literature? (Gee, Bob, some of us have even read some of the stuff). In 
the case of Japanese bank-based capitalism with which I'm most familiar, are 
your references to greater organizational efficiency related to keiretsu 
banks' relationships with affiliates in reducing the cost of capital, in 
coordinating investment plans, in relational contracting with subcontractors, 
in acting as corporate automatic stabilizers in the macro context, or acting 
as penultimate lenders of last resort? If so -- or not -- please say so. It 
would help the discussion along to more substantive issues. And what do 
Pollin and Roemer have to say on the impact of this banker capitalism or 
cartel capitalism on consumers, workers, small/medium size enterprise, and 
democratic process? 
                      
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Brent McClintock                    |                           | 
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