Finnish government preparing to nationalize the stock market in the name of protectionism
The Finnish government has presented a plan to consolidate all "non-strategic" government-owned stocks under a government company called Solidium Oy . And in addition, the company would be given authority to buy stocks to "maintain domestic ownership" if the price of a stock falls too low. But the company would be allowed to do so only with borrowed money, not tax money. Which, in the opinion of the government, means that all purchases have to be considered carefully and thus will prevent haphazard stock purchases. Yeah, sure.

If I recall correctly, according to Mises a capitalist economy can be identified by a functioning stock market. If so, Finland can be scrapped from the list of (somewhat) capitalist economies.

Posted: Wed, Oct 22 2008 10:59 AM by Libertas est Veritas with 5 comment(s)

Comments

# re: Finnish government preparing to nationalize the stock market in the name of protectionism @Wednesday, October 22, 2008 6:52 AM

Very scary.

I am appalled on how the world is following Chávez misteps. What a disgrace to my homeland and to Bolívar's legacy. In Venezuela what happened was that the government bought Electricidad de Caracas shares from AES Corporation (US), CANTV the telephone company from an international consortium (Telefónica & Verizon), CEMEX, among others. The Caracas stock exchange now has only about 10 stocks left !!

Of course, that kind of government spending cost a lot of oil money that was urgently needed for more sound investment.

Actually what may probably happen in Finland is that many of those companies that will be nationalized are sound enough so that the government will be able to secure bargain, margin-call type prices.

Where does Nokia fall on all this?

Rubén

# re: Finnish government preparing to nationalize the stock market in the name of protectionism @Thursday, October 23, 2008 9:44 AM

This would be a foolish act by the Finnish Govt. All markets do is establish a price based on the environment. If a forest fire burns up all the wood in a country, markets will raise the price of wood because it is scarce. Having the Government interfere with that pricing mechanism only distorts the market and causes improper pricing of widgets. This in turn leads many other problems.

Alby