ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by D N GhoshSubscribe to D N Ghosh

Gullibility of the Investor and Pastimes of Marketmen

Gullibility of the Investor and Pastimes of Marketmen D N Ghosh "A SOLICITOR or two, a civil engineer, a parliamentary agent, possibly a contractor, a map of England, a pair of compasses, a pencil and a ruler were all that were requisite to commence the formation of a railway company in those halcyon days at any rate so tar as the drawing of the prospectus was concerned. Then that document had to be embellished with the names of a few noble and gentle country landowners and well-to- do manufacturers as provisional directors. These were all the ingredients for forming a railway company." These are reminiscences of Edward Callow, a member of the stock exchange as quoted by Charles Duguid in his book, The Story of the Stock Exchange. Duguid was commissioned to write this book to mark the centenary of the laying of the foundation of the new stock exchange building at Capel House, London, in May 1801. The book which covers the important events at the London Stock Exchange during the 19th century keeps the reader engrossed with the recurrent incidents of fraud, deceit and the credulousness of the investor. This is virtually a repetition of what Daniel Defoe wrote ''proving that the scandalous trade, as it is now carried on, to be knavish in its private practice and treason in its public" in the subtitle of his tract The Anatomy of the Stock Exchange Alley. Duguid relates many telling instances of investor credulity. It is difficult to pick and choose, but even 200 years later, the incidents are alarmingly similar to what happens in today's market, Edward Callow in his book City Press, talking about the year 1845, described the beginning of the Railway Mania in the London Stock Exchange. Sixteen new companies were floated in January and by September the number had gone up to 1,036; in October 363 more were added. The schemes would require hundreds of millions of pounds to bring them to fruition. It was not the railways that the promoters were interested in, but the deposits and premium on the shares. The venerable Times of London warned "We cannot add 50 millions of money to rail way enterprises without the most ruinous, universal and desperate confusion." But George Hudson, the uncrowned Railway King, was the revealed God to the investing community.

US Hegemony and Future of Capitalism

Will the forces that are shaping the world economy undermine some of the stability assumptions of today's largest and most powerful economy? What will be the impact of these forces on the developing economies which have by and large come to accept the inevitability of working within the network of the global capitalist system?

MNEs Are Adjusting Their Sights

MNEs Are Adjusting Their Sights D N Ghosh The MNEs have their own strategies for the highly competitive global marketplace and are impervious to the consequences of these strategies for the specific economies they happen to operate in. These consequences could be unpalatable for employment and for domestic industry and services.

Level Playing-Field A Mirage

Level Playing-Field: A Mirage D N Ghosh How can the so-called Bombay group hope to derive any advantages from what is vaguely referred Was a 'level playing-field'. What these businessmen are asking for are certain financial facilities to acquire and maintain undisputed control of what they claim to be their own corporate entities. They seem to feel that they would be safe with majority control and could keep off hostile take-overs by foreign investors, this is ah illusion, however THE Volvo-Renault merger deal has touched soft spots in the Swedish psyche. The Volvo board considers this link as strategic to the long-term survival of its car manufacturing activities. This business decision is also perfectly in tune with the Swedish overtures to join the European Community. Volvo regards the decision, as a spokesman of the company puts it, "normal, natural and fair" Nonetheless several questions have been raised. As Volvo has always been a symbol of national pride, many Swedes would not like it to be tarnished. Volvo shareholders too feel uncomfortable that the French government would step in as the owner of the merged company. Even a respected conservative newspaper, which is normally against state intervention, has called upon the prime minister to stop the deal. Just as Renault is important to France, so is Volvo for Sweden

Reserve Bank Autonomy-Facing the Issues

While independence from the government is a necessary condition for a strong and effective central bank it is not a sufficient condition. The degree of effective independence and public acceptance will depend on how well a central bank performs and defends its own role over time. The issue needs to be deliberated on by an independent commission-but not as a command performance.

Struggle for Reform

Struggle for Reform D N Ghosh M. I do not claim expertise in any particular area and perhaps that is my strength. The White Paper covers a wide gamut of issues and we may confine ourselves to its most sensitive aspects. I must confess I am confused as to what is the core element in the currentprocess of economic reform. R. The goals of reform are growth and productivity in all sectors. We must achieve productivity levels which make our economy cost-effective and competitive in a global context. We are laggards in all fcteas, be it utilisation of capital, labour, land or services.

Dealing with MNEs

D N Ghosh Rival States, Rival Firms: Competition for World Market Shares by John M Stopford, Susan Strange with John S Henley; Cambridge University Press, Cambridge, UK, 1991; pp 321 + xiii. price not stated.

Priorities for Financial Reform

Priorities for Financial Reform D N Ghosh It is only by taking the debate on financial reform to a wider forum that we can in the medium term hope to develop a financial structure which is efficient and institutionally capable of putting through the reform process and serving the diverse needs of the real sectors of the economy.

No Apology for Turning Inwards

No Apology for Turning Inwards D N Ghosh In the developed countries there is a great 'turning inwards'

Making Foreign Investment Flow

Making Foreign Investment Flow D N Ghosh Multinationals and international business houses may be interested in seeking a foothold in India but only on their terms and conditions in regard to the choice of sectors, the conditions of their operations and the rights they would like to enjoy Inflow of foreign investment on a massive scale, which many in our country talk of, can come only on these terms. Are we prepared politically for a complete turnabout in our policies?

Free Marketism Precept and Practice

Free Marketism: Precept and Practice D N Ghosh While developing countries are being relentlessly pressurised to embrace free market policies no matter what the consequences, government intervention in support of local industry is increasingly finding favour in both the UK and the US.

Bank Profitability and Priority Sector Lending-From Populism to Impressionism

The curtailment of the target of priority sector lending to 10 per cent, as urged by the Committee on the Financial System, will send an unfortunate signal to the dispensers of credit that the basic objective for which priority sector lending was developed two decades ago is being diluted. Policy-makers in developing countries will from time to time find that they have to reconcile conflicting objectives, but they cannot afford to let crucial economic agents, such as banks and financial institutions, choose the easy way out of such situations.


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