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|The Speculation Economy |

|How Finance Triumphed Over Industry |

|By Lawrence E. Mitchell |

Not too long Only a few years ago, before the technology bubble burst, it was not uncommon to we read more than a few stories about some new companyies “going public” without havingany earnings and sometimes without even an actual product or service to sell. Traders gobbled up their stock, and Ssome of these companies even saw their stock prices peak before a single business transaction took placethey did a dollar’s worth of business. Why? At some a precise point in our country’s history aAt some point in America’s history a fundamental shift occurredtook place in the American the economy: the priorities ofgoal of American industry was no longer singularly focused onchanged from producing the best the best goods and services, but instead infatuated withto serving the needs of the stock market. How did this change occur? When and why did the stock market emerge to become the driving force of the American economy?

In The Speculation Economy, distinguished economistprofessor Lawrence E. Mitchell tells the fascinating story of how finance bbegan toits triumph over industry. Mitchell identifies a surprisingly brief periodbrief moment at the turn of the twentieth-century as the tipping pointpivotal moment. It was at that timethen that corporate industrialistspromoters and bankers like J.P. Morgan began merging combining existing companies into larger “combines” (precursors to today’s gigiant corporations) so they could profit get rich by manufacturing and selling stock in these organizationsand dumping it on the public. By the dawn of 1920s the stock market had left behind its business origins to become the very reason for the creation of business itself. Mitchell tells,describes in with virtuosic detailskill, the story of the personalities who made it happen, the legal changes that allowed this happenit, the presidents and congressesfederal regulatory oversights that missed the its significance of this phenomenon, and the social cchanges in society that transformed the economic landscape and encouraged more and more Americans to enter the marketmade the stock market the centerpiece of American economic life.

As evidenced by episodesscandals like Enron and WorldCom demonstrate, there are pitfalls todangers in an economy so girdedfocused devoted on to to the short-term desires of Wall Street and investors. While the sheer force of the economy may seem too formidablestock market economy may seem too far gone to change now, Mitchell sees hope in its history. “The history of speculation,” he writes, “is a history of choice.” “We may choose to accept the history as we have developed it. Or we can alter it.”

A groundbreaking exploration of the birth of the stock market and the modern American economy, The Speculation Economy will be applauded by any reader interested in economic history and troubled by the prevailing climate of corporate malfeasance and irresponsibility.

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Peter – I would use Seligman’s blurb here, not Steve’s which is too pedantic. Joel is also better known. "Mitchell’s provocative thesis is that the development of the modern American public corporation was not an organic process but rather occurred almost overnight at an identifiable point in time and as a result of identifiable political and economic forces. This important new work helps us understand the forces that continue to shape the dominant form of economic actor of our time."

— Stephen M. Bainbridge, William D. Warren Professor of Law, UCLA School of Law

“Lawrence Mitchell's new work is full of fresh insight about the rise of what he calls ‘American corporate capitalism.’ Anyone interested in the development of our modern financial markets will be richly rewarded by a careful reading.”

—Harvey J. Goldschmid, Dwight Professor of Law, Columbia University, former Member, United States Securities and Exchange Commission

“Mitchell highlights two of the most pivotal events in our history of modern finance: the rise of Wall Street and investment banking as a key factor in American capitalism and the federal government’s response to the ever more complex role of finance capitalism. Mitchell’s writing is graceful, comprehensive, and persuasive that as significant as the story of trusts and the trustbusters has been, the rise of finance capitalism and ultimately its federal coordination through such agencies as the Federal Reserve System and the Securities and Exchange Commission may be even more important.”

—Joel Seligman, President, University of Rochester and author, the Transformation of Wall Street.

“Lawrence Mitchell's new work is full of fresh insight about the rise of what he calls ‘American corporate capitalism.’ Anyone interested in the development of our modern financial markets will be richly rewarded by a careful reading.”

—Harvey J. Goldschmid, Dwight Professor of Law, Columbia University, former member, United States Securities and Exchange Commission

“Mitchell’s provocative thesis is that the development of the modern American public corporation was not an organic process but rather occurred almost overnight at an identifiable point in time and as a result of identifiable political and economic forces. This important new work helps us understand the forces that continue to shape the dominant form of economic actor of our time.”

— Stephen M. Bainbridge, William D. Warren Professor of Law, UCLA School of Law

“An impressive work of legal, economic and historical scholarship that will enrich today’s debate over corporate accountability and regulatory policy.”

— Charlie Cray, Director of the Center for Corporate Policy and co-author of The People's Business: Controlling Corporations and Restoring Democracy

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Lawrence E. Mitchell is the Theodore Rinehart Professor of Business Law at The George Washington University. His other books include Corporate Irresponsibility: America’s Newest Export, Stacked Deck: A Story of Selfishness in America, and Progressive Corporate Law.

|The Speculation Economy: How Finance Triumphed Over Industry |

|By Lawrence E. Mitchell |

|Published by Berrett-Koehler Publishers, Inc. |ISBN: 978-1-57675-400-9 |

|A BK Currents Book |Cloth, $35.00 |

|Number of Pages: 377 |Pub Date: October 22, 2007 |

Lawrence Mitchell is available for interviews. Please call Peter Cavagnaro at (415) 743-6469 or email pcavagnaro@ with any questions about the author and The Speculation Economy.

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