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leaderless collective


            The Leaderless Collective deals with the subject of financial markets and, in this section, Norberg seeks to refute the three main arguments advanced by critics of globalization on this issue, namely, the irrational movement of stock markets caused by speculators, the increasing market fluctuations in recent years and the free movement of capital across borders. .
             First issue: uncontrolled financial markets .
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             Opponents of globalization.
             Argue that irrational speculators can wreck havoc on individuals and companies by investing wildly and then precipitously withdrawing their capital. .
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             Norberg .
             Argues that speculators, far from being irrational, act in an extraordinary rational manner. The speculator's primary concern is to increase his profits in the most efficient manner. Thus, a firm's shareholders are pleased when the firm cuts jobs, not because of they delight in unemployment but because of the ensuing reduced expenditures and greater productivity. Similarly, the American stock market often rises when the unemployment rate increases. This is because speculators believe that the Federal Reserve is likely to lower interest rates to stimulate growth. .
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             My opinion.
             Although I would agree that speculators have a certain logic in their approach to investment, in practice, the financial market is sometimes subject to information asymmetry, where one party to a transaction has less information than the other. The revolution in communication technologies has attenuated, but not eliminated, information asymmetry, so that international markets remain prone to sharp investor reactions and unpredictable market movements (E & M, 3). The net result is that although speculators may act in a rational way to benefit themselves, small investors may still be terribly hurt in the process. .
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             Second issue: Increasing market fluctuation .
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             Opponents of globalization.
             Contend that stock market fluctuations have increased significantly in recent years.


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