Page 1 - February 2018 Disruption Report Flip Book

The unintended consequences of financialization
...[G]overnments having forgotten what money is for and how it works. As a result, they’re issuing more and more of it, on the assumption that somehow money constitutes wealth, instead of realizing that money measures wealth. Now, the biggest industry in the world economy is the $5.1 trillion per day currency-trading carnival, which, in the end, doesn’t even yield stable currencies. It doesn’t even provide a measuring stick for entrepreneurial activities. So I think it’s perfectly possible for people to blind themselves to the real sources of their progress and prosperity.
...[M]easuring progress through GDP is treacherous. GDP is a general measure with a dollar index, and I don’t think it captures the qualitative nature of technological progress. All real increase in human welfare derives from invention and creativity, which is summed up in technological progress. Now, the great recession of 2008–12 or 2013 was a really serious event, despite the so-called stock market boom that went on.
IPO VOLUMNE HAS BEEN VERY LOW IN U.S. SINCE 2000
In 1980-2000, an average of 311 firms went public every year In 2001-2011, an average of 99 firms went public every year
800 700 600 500 400 300 200 100
00
Number of Offerings (bars) and Average First-day Returns (blue) on US IPOs, 1980-2011
...[The tripling of stock values] is nullified by the drastic shrinkage in the number of public companies. Since the 1990s there has been a 50% drop in the number of public companies,
IPO volume has been very low in the U.S. since 2000
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FEBRUARY 2018
80 70 60 50 40 30 20 10
Number of IPOs
Average First-day Returns
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