The only "good" part of it is the primary market, but there, as I pointed out only in limited cases and in the context of the whole economy only a very marginal asset. There are lots of good (and also big) companies out there which never listed on the stock exchange (think of most of the German Mittelstand or German companies like Bosch and Aldi).
Getting rid of the stock market is not going to be easy, that was my rambling at the end how already listed companies could delist... But the government could play a role at least curtailing many of the the sick side-effects of stock markets (essentially all hedge fund and investment banking activity). Banning naked short-selling, high frequency trading and instituting a tobin like tax of e.g. 1 cent per share trade would go a long way. Forcing shareholders to hold a stock for a certain minimum time period might also produce some positive side effects...
Essentially, there are a lot of questions which need to be answered. My point at first was only to say that stock markets are practically useless for the economy. But just like the atomic bomb a the stock market cannot just be "un-invented"...
Also, you seem to be treating markets and exchanges as synonymous. SME's (and shares in them) get bought and sold every day - just not via exchanges. The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
Your point about the difference between markets in general and stock exchanges is a good one. thanks. My main gripe is with stock exchanges because they made all the shenanigans of the past 20 years possible. By commoditising the selling and buying of company fractions so easy a whole entire industry has developed which parasticially feeds on these transcations and in many ways turns the whole market into a big Ponzi scheme.
Forcing all corporations to be privately held corporations would be a big move with a lot of unintended consequences. And the more wrenching the move, first, the greater the likelihood that efforts invested into mobilizing to achieve it will be for naught, and second, the greater the risk that the unintended consequences will include massively malignant ones.
Saying it explicitly, the proposal is either to force owners of corporations to remain owners of the corporation until they die or the corporation goes bankrupt is not, or else to make some cosmetic change to how stocks are traded with no real major impacts.
If the former, why not just propose abolishing open-ended charters and require charters to be renewed every fourteen years? That would allow corporations to be brought to heel by binding them with new charter terms, and that would not be anywhere near as massive an institutional change as abolishing publicly traded corporations.
And if the latter, why bother? I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
