Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Patent
1995-11-20
2000-08-29
Cosimano, Edward
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
705 36, G06F 1760
Patent
active
061121886
DESCRIPTION:
BRIEF SUMMARY
FIELD OF THE INVENTION
The present invention is generally related to the fields of information technology and market economics. The invention is more particularly related to computerized tools and methods useful for achieving a successful market economy. Yet more particularly, the present invention is related to tools and methods useful for privatizing, or transferring from state ownership to individual ownership, large state enterprises in newly democratic nations.
BACKGROUND OF THE INVENTION
Among the many tasks necessary to create a successful new world order, after the events of the past several years in Eastern Europe and the former Soviet Union, it will be necessary to transfer ownership rights in substantial portions of some countries' vast state-owned capital stock into private hands. In such countries, as well as others currently lacking effective owner shares markets, it may be desirable to develop policies and tools for operating such owner shares markets. Methods, tools and tasks necessary to accomplish such an enormous economic undertaking, without causing socially destructive economic dislocation is the subject of intense current research.
It is a general goal of the present invention to provide computerized market tools usable in countries which may be lacking market infrastructure. It is a more specific goal of the present invention to make available computerized market tools able to support any privatization policy chosen by government policy makers, including making possible the universal distribution policy outlined below.
The universal vesting in the citizenry of newly democratic nations of ownership in large state enterprises is both desirable and feasible. The current crises in social welfare threaten the transition to free markets and democracy. Large state enterprises are key. They are a major societal asset capable of providing a social "safety net" in addition to a "trampoline" of opportunity. Their effective privatization is a precondition to a free market economy. Universal vesting of the future ownership interest in large state enterprises strengthens the "safety net" and "trampoline" by broadly distributing a major asset. It strengthens the prospects for a free market economy by equitable, fast and effective privatization.
The conventional wisdom which writes off universal vesting as a laudable but unrealistically idealistic objective is wrong. The idea that ownership should be awarded to stakeholders, such as those already fortunate enough to happen to be employed at successful enterprises on the day they go private, would randomly redistribute and concentrate wealth to the advantage of a quite small percentage of the population. Even extremely widespread share-ownership is consistent with management acting in the shareholder interest, by means of polled voting and executive compensation tied to stock market valuation.
Universal vesting can promote the transition to free markets by immediately resolving the legal and economic issue of ownership rights. In the process, it can help legitimize the process of transformation. While entrenched interests and nostalgia buffs remain potent forces, it would seem that the inchoate clout of the entire citizenry is also something to be reckoned with.
The road to democracy can be rocky. For example, there is a real danger of "famine, social upheavals and chaos" in Russia. The result can be catastrophic feedback loops among undesirable social processes. Social disarray can cause famine and epidemics. Famine can lead to mass migrations, the breakdown of sanitation service, and epidemics of infectious diseases. After an initial period of kinship and concern for vulnerable members of society, family and social structures can disintegrate into survivalism and lawlessness, leading to riots, insurrections and revolutions. Even if such calamities are avoided, there remains the all-too-realistic hazard of a decades-long political stalemate which would block economic restructing and positive social transformation. These are dangers which pose a
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Lorinc, Marek, Investing in financial markets of East and Central Europe, The Columbia Journal of World Business, pp. 88-111, Spr, 1995.
Voucher power, The Economist, pp. 18-20, Sep. 21, 1991.
Milan Ruzicka, Risks Cited as Czechs Begin Massive Stock Trading, Journal of Commerce, p. 2A, May 24, 1993.
Dr. W. P.Vossen, Investment Climate in Eastern Europe, Plant Sites and Parks, p. 32, Aug. 1992.
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