Wrong tool for the job

| 19/09/2009

(Economist): “It isusually agreed that casinos should, in the public interest, be inaccessible and expensive. And perhaps the same is true of stock exchanges.” John Maynard Keynes, writing in the 1930s, was in favour of making it costly to switch into and out of investments. With just a trace of English snobbery, he wrote approvingly of the high fees and taxes levied on share transfers in the City of London, which he contrasted with the lower turnover costs on Wall Street. The smooth workings of New York’s stockmarket served only to promote “speculation” over “enterprise”, he wrote. The sins of London were less grave.

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