Managed by the Markets

The current economic crisis reveals just how central finance has become to American life. Problems with obscure securities created on Wall Street radiated outward to threaten the retirement security of pensioners in Florida and Arizona, the homes and college savings of families in Detroit and Southern California, and ultimately the global economy itself. The American government took on vast new debt to bail out the financial system, while the government-owned investment funds of Kuwait, Abu Dhabi, Malaysia, and China bought up much of what was left of Wall Street. How did we get into this mess, and what does it all mean? Managed by the Markets explains how finance replaced manufacturing at the center of the American economy and how its influence has seeped into daily life. From corporations operated to create shareholder value, to banks that became portals to financial markets, to governments seeking to regulate or profit from footloose capital, to households with savings, pensions, and mortgages that rise and fall with the market, life in post-industrial America is tied to finance to an unprecedented degree. Managed by the Markets provides a guide to how we got here and unpacks the consequences of linking the well-being of society too closely to financial markets.

ISBN 0199216614   Pages 328 ISBN13 9780199216611 (What's this?)   Volumes 1 Publisher Oxford University Press   Weight (grammes) 722 Imprint Oxford University Press   Published in Oxford Format Hardback   Height (mm) 241 Publication date 26 Mar 2009   Width (mm) 162 Library of Congress 2008055141   Spine width (mm) 22 DEWEY 332.0973   Academic level Postgraduate, Professional / Scholarly DEWEY edition DC22

1		The New Financial Capitalism		1
2		Financial Markets and Corporate Governance		31
3		From Institution to Nexus: How the Corporation Got, Then Lost, its Soul		59
4		From Banks to Markets: How Securitization Ended the "Wonderful Life"		102
5		From Sovereign to Vendor-State: How Delaware and Liberia became the McDonald's and Nike of Corporate Law		154
6		From Employee and Citizen to Investor: How Talent, Friends, and Homes became "Capital"		191
7		Conclusion: A Society of Investors?		235
		Notes		256
		References		255
		Index		295

a valuable, timely and gripping analysis by Gerald F. Davis... Davis's book should be required reading for anyone, whether academic, practitioner, or policy maker, who needs to think critically about finance which, rather than a mechanistic set of transactions, is presented in the book as a social phenomenon that is invading our lives. Nihel Chabrak, Berkeley Electronic Press Timely and thought-provoking. Choice an ambitious, magisterial, and yet not-too-long effort to sketch the social consquences of a finance-driven economy. Matthew Yglesias, American Prospect A floodlight on the new economy with Davis' laser lighting up finance. Meltdowns, securitization, credit default swaps: all become frighteningly clear in his account of the fiscal revolution of the last two decades. Charles Perrow, Emeritus Professor of Sociology, Yale University In this intellectual tour de force, Jerry Davis describes the evolution of the American economy to where we are now -- where everything is a security or an option and, therefore, tradeable in some sort of market. He also details the profound costs we have paid for this evolution. Timely, engaging, and filled with facts and analysis, Managed by the Markets explains how we got to where we are and maybe, just maybe, where we need to go next. Jeffrey Pfeffer, Professor of Organizational Behavior at Stanford University and author of What Were They Thinking? Unconventional Wisdom About Management The meltdown of American financial markets has been catastrophic but the cause elusive. In Managed by the Markets, Gerald Davis offers a compelling explanation for it and so much more. To understand the dis-integration of big corporations, securitization of just about everything, and transformation of our zeitgeist from producing products to making money, this is the book: a gripping portrait of the triumph of financial markets over all else. Michael Useem, Professor of Management and Director of the Leadership Center at the Wharton School, University of Pennsylvania Managed by the Markets gave me more food for thought than any of the other books mentioned in this review. In the past 20 years, finance did indeed triumph over other modes of enterprise in the U.S. and elsewhere. This was, as Davis says, a momentous shift. To the victor went the spoils, with far-reaching social and economic consequences. In contemplating the wreckage of the crisis, one should follow Davis's example, and ask whether this was inevitable or desirable, and what, if anything, we might learn from it. Clive Crook, Strategy + Business, Best Books 2009

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