Date: Wed, 29 Oct 1997 14:23:15 -0500
From: Doug Henwood <dhenwood-AT-panix.com>
Subject: Re: M-I: Re: labor's bargaining room


Louis R Godena wrote:

>I have already cited the US with its highly liquid, deep capital markets
>(I'll address Dennis Redmond's dissent in another post), which apparently
>have become quite proficient at channeling capital to the right start-up
>businesses, which, in turn, become highly successful job-producers.

This is wrong on two counts. First, the U.S. venture capital industry is
actually quite small - it places just $3-5 billion a year. The rest of the
capital market apparatus is irrelevant to it, since they don't like to fund
anything but established operations. And second, start-up businesses
produce lots of jobs, but they also destroy lots of them, since they have
short life expectancies. Most job growth results from the expansion of
existing enterprises, not neonates. In general, small businesses is not the
copious job producer it's said to be.

Doug





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