Managed by the Markets: How Finance Re-Shaped America

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OUP Oxford, Mar 26, 2009 - Business & Economics - 304 pages
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The retail industry now employs far more Americans than the manufacturing sector.Wal-Mart alone employs more Americans than the dozen largest manufacturers combined.Managed by the Markets explains how finance has replaced manufacturing at the center of the American economy and what it means for business, banking, government, and individuals. For much of the 20th century, American society was shaped by large corporations and their business and employmentpractices. But since the early 1980s, finance and financial considerations have increasingly taken center stage, reshaping the institutions of American society along the way. Corporations have become more focused and network-like, with an overriding orientation toward creating shareholder value, while their personnel practices no longer provide secure employment, economic mobility, health insurance, or retirement benefits. Instead, employees are advised to becomeshareholding free-agents, responsible for their own fate. Banking has shifted from a traditional format of taking in deposits and making loans to an originate-and-distribute model, turning loans (such as mortgages or corporate debt) into bonds owned by institutional investors. The financial servicesindustry is both more concentrated among large banks and mutual funds, yet more disaggregated among under-regulated specialists such as mortgage finance companies and hedge funds. States increasingly act as "vendors" in a global marketplace of law and emulate the business practices of network firmssuch as Nike, hiring contractors to do much of the basic work of government. Without stable corporate employers, individuals and households find their welfare tied to the stock market and the mortgage market. The turbulence of the stock market and the housing market in the early years of the 21st century have demonstrated the dangers of tying society too closely to financialmarkets. Managed by the Markets explains how the new finance-centered system works, how we got here, and what challenges lie ahead.
 

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Contents

1 The New Financial Capitalism
1
2 Financial Markets and Corporate Governance
31
How the Corporation Got Then Lost its Soul
59
How Securitization Ended the Wonderful Life
102
How Delaware and Liberia became the McDonalds and Nike of Corporate Law
154
How Talent Friends and Homes became Capital
191
A Society of Investors?
235
Notes
256
References
285
Index
295
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About the author (2009)

Jerry Davis is the Wilbur K. Pierpont Collegiate Professor of Management at the University of Michigan's Ross School of Business. Davis received his PhD from Stanford University and has previously taught at Northwestern University and Columbia University. He has published widely in management,sociology, and finance. Recent books include Social Movements and Organization Theory (with Doug McAdam, W. Richard Scott, and Mayer N. Zald; Cambridge University Press, 2005) and Organizations and Organizing: Rational, Natural, and Open System Perspectives (with W. Richard Scott; Pearson PrenticeHall, 2007). He is currently Associate Editor of Administrative Science Quarterly and Co-Director of the Interdisciplinary Committee on Organization Studies (ICOS) at the University of Michigan.

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