The Speculation Economy: How Finance Triumphed Over Industry

The consequences of even a modest decrease in a business’s stock price have become so dire that some executives would rather damage their corporation’s long-term health than allow quarterly returns to fall below projections. How did this situation come about? Lawrence E. Mitchell shows that the tipping point came in the first years of the 20th century. He explores the legal, financial, economic, and social transformations that led to the birth of the giant modern corporation and how this in turn spurred the rise of the stock market. Mitchell identifies what made traditionally cautious Americans become eager stock speculators, and why the federal government’s attempts to regulate finance completely missed the mark. By the dawn of the 1920s, the stock market had left behind its business origins to become the very reason for the creation of business itself.