A tuyere is a weird, tough, heat proof, somewhat hard to make (depending on your local technological level) compressed air nozzle. If there's a steel mill blast furnace nearby, you can make a fat stack of cash making and selling tuyeres. Its kind of a specialists metalworking job in that an idiot can make one that doesn't last and falls apart at the worst possible time causing thousands of dollars of missed production, but a specialist can make a good one. If you operate a steel mill blast furnace you won't make much money without a supplier of cheap, quickly replaced, reliable tuyeres (and you also require a zillion other things...) If there's no steel mill nearby then a tuyere maker won't be in business very long.
Anyway the point is much like some agriculture analogies you plop down a steel mill next to a metal shop specializing in tuyere construction and repair, and they both thrive. Take away either, and the other eventually disappears. Going back in history there is no spontaneous generation of either blast furnaces or tuyere metalworking shops separately. They always and only develop, grow, and survive together, simultaneously.
Now lets talk about another pair of technologies that can only thrive in the presence of each other... the capitalist stock market, and early industrialization. Unlike the tuyere example, for both of these, without the other, they can exist, barely, but only a thousandth the size in the long run if required to operate alone. You can kinda industrialize without a stock market, communist style, but it doesn't work nearly as well.
The USA is in a post industrial era. Therefore soon we'll be in a post stock market era. Stock trading will still exist, just maybe a thousandth the size, volume, and importance.
Even today the decline is evident. I'd estimate a century ago "everyone" in my family and maybe in the country worked for a stock market financed industrial company, or indirectly in that all their revenue came from stock market financed industrial companies. The value of the DJIA directly influenced if the railroad expanded and therefore promoted my g-grandfather. Today? Half the population does not work (young, old, sick, unemployable, etc), my wife works for the .gov so the market means nothing to her, my sister and I work at (different) megacorporations that are so large the market cannot handle them anymore (like our employers influence the market, not the market influences our employers LOL). Many of my friends work for non-profits or privately owned/financed firms. My dad's last day at his career position in a stock market financed company was in the early 80s, and it was mostly contracting at privately owned companies for the next 20 years. I've only worked at two companies financed by the stock market and I've never had a career and probably never will. I could do pretty well without the market.
Many information-age business models (SaaS, marketplaces, advertising & other grow-first-then-monetize consumer businesses) are even more dependent upon capital than their industrial-age predecessors, since they run at a loss until they completely saturate a market and then turn on the money spigot. They've just been going to the private markets rather than the public markets because the Information Age started with a massive speculative bubble that scared everyone off. I think that as people realize that the Internet is real and actually will change everything about society, they'll be an increasing call for the general public to get in on this wealth creation.
once they are a money spigot they don't need the capital market.
when they are money burning they are too risky for what we consider acceptable for a stock listing (though biotech seems to be an exception for some odd reason)
there are no 'safe' way to deploy capital that returns 6%
But that's always been the nature of capital - there are no returns without risk. Capital's always been a bet on the uncertain future - the whole reason we have the concept of a modern corporation is so that risk can be spread across lots of people who can afford to lose the money they put up.
The percentage of investors who lost their shirt in the Industrial Revolution dwarfs those who lost their shirt in the dot-com boom. It's just that everybody who went broke investing in a refinery or mining scheme that was just snake oil dropped out of the history books, and we only hear about the people who got fabulous wealthy.
> I'd estimate a century ago "everyone" in my family and maybe in the country worked for a stock market financed industrial company, or indirectly in that all their revenue came from stock market financed industrial companies.
That is not true at all of my family - they were all farmers until my parent's generation. To pull out some real statistics: in 1870, over 50% of Americans were farmers. A century ago it looks like about 30%.
Or, the finance market has priced itself above the average income. Without a doubt, the US economy would produce more if there were higher demand - financed by higher wages. That would increase financial market participation.
Anyway the point is much like some agriculture analogies you plop down a steel mill next to a metal shop specializing in tuyere construction and repair, and they both thrive. Take away either, and the other eventually disappears. Going back in history there is no spontaneous generation of either blast furnaces or tuyere metalworking shops separately. They always and only develop, grow, and survive together, simultaneously.
Now lets talk about another pair of technologies that can only thrive in the presence of each other... the capitalist stock market, and early industrialization. Unlike the tuyere example, for both of these, without the other, they can exist, barely, but only a thousandth the size in the long run if required to operate alone. You can kinda industrialize without a stock market, communist style, but it doesn't work nearly as well.
The USA is in a post industrial era. Therefore soon we'll be in a post stock market era. Stock trading will still exist, just maybe a thousandth the size, volume, and importance.
Even today the decline is evident. I'd estimate a century ago "everyone" in my family and maybe in the country worked for a stock market financed industrial company, or indirectly in that all their revenue came from stock market financed industrial companies. The value of the DJIA directly influenced if the railroad expanded and therefore promoted my g-grandfather. Today? Half the population does not work (young, old, sick, unemployable, etc), my wife works for the .gov so the market means nothing to her, my sister and I work at (different) megacorporations that are so large the market cannot handle them anymore (like our employers influence the market, not the market influences our employers LOL). Many of my friends work for non-profits or privately owned/financed firms. My dad's last day at his career position in a stock market financed company was in the early 80s, and it was mostly contracting at privately owned companies for the next 20 years. I've only worked at two companies financed by the stock market and I've never had a career and probably never will. I could do pretty well without the market.