The Financial Century: From Turmoils to Triumphs

Robert W. Sexty is a professor of commerce and business administration
at Memorial University of Newfoundland and the author of Canadian
Business: Issues and Stakeholders.

Economies are typified as being between two extremes: totally government
controlled versus laissez-faire, or free market, with Marx, Lenin, and
Hegel advocating the former and Smith, Friedman, and Hayek the latter.
Reuven Brenner is a strong advocate of the free market system as
established by open and democratized capital markets. In this book, he
argues that access to capital along with labor mobility is fundamental
to prosperity. Among the five sources of capital he
identifies—inheritance, savings, government, crime, and capital
markets—it is the last source, he suggests, that propels economies and
raises standards of living. The economy best understanding this is the
United States, and the last 100 years have been its “financial
century.”

According to Brenner, democracy alone is not enough to create
prosperity—there must also be an openness of financial markets and
private ownership. Globalization should open markets and increase
mobility of human resources. Yet, nationalism creates problems when
governments force priority to one particular loyalty based on genes,
accident of birth, or language. The fastest way for an economy to grow,
achieve prosperity, and raise standards of living is to attract masses
of talent to a place and foster the opening up of the financial markets.

Governments are monopolistic financial intermediaries and too often
make mistakes in allocating capital. Thus, direct democracy and share
ownership are necessary. Financial markets should be based on the wisdom
of many, not the wisdom of a few politicians and/or bureaucrats. Other
factors interfering with open markets, Brenner writes, include
nonscientific ideas that inappropriately gain legitimacy and the failure
of educational institutions to stop the spread of false ideas. Consider
this book as merely one view in the continuing debate between the two
economic extremes.