How would the industry of investment banking change under socialism?
I mean this functionally for the banks themselves as well as the wider industry of businesses seeking either capital raising / M&A. What would this mean for capital deployment from investment banks? Would certain industry groups be completely eradicated?
In an actual socialist environment, IB wouldn't exist. The stock market wouldn't exist. All large businesses would be government owned. If you mean something closer to modern Nordic/French democratic socialism, then in terms of the actual banking institutions, not much would change, but you would probably see less M&A activity due to government regulation. Hedge funds and PE would probably be far more hurt than traditional coverage IB.
But wouldn’t businesses still engage in M&A in some form or another? Would it just be “brokered” (forced) by the government ?
I presume there would be far more government regulation on antitrust, and it would be harder to assume cost synergies when worker's rights laws prevent layoffs. There certainly are successful investment banks in France like Rothschild & Lazard. Stockholm is also the banking capital of the nordics, so it's not like banking doesn't exist.
One of the biggest things about the United States that is incredibly underrated is its bankruptcy code. The US is probably the best major economy in the world to declare bankruptcy in due to how debtor friendly it is. This allows for things like startups to take more risks and innovate. I'm not sure how this would be affected by socialism, but you'd think a dem-soc country would be more debtor friendly, but in reality this isn't the case.
Under socialism all businesses will be worker owned not Government owned. Unless you are saying under socialism the Government = workers (as democratic as it gets I guess) then yeah sure
Socialism =/= communism. Socialism by Marx’s definition is a government run by a “dictatorship of the proletariat” but ownership still belongs to a government technically. This is obviously insanely susceptible for corruption as seen with the Soviet Union. The end goal is stateless communism….but obviously that never happened with any communist revolution. And I would argue it cannot happen until something fundamentally changes about human nature.
Marxists try to create a distinction between a “government” and a “state,” but in reality there is not really a difference
Insane how people don’t understand this, both from self-proclaimed “socialist” liberals and conservatives
Your bonus would get taxed at 80% instead of 50%
This literally did happen in France through. They raised their top marginal rate for income over €1m (would apply to MDs) to 75%. It failed miserably due to people just leaving France because of EU mobility rights, so they lowered it to 45%.
Marx specifically talks about having to prevent emigration because of this exact issue. Which is why you could never leave the Soviet Union for the west unless you had top level approval.
Obviously France isn’t the Soviet Union, but the issue is the same.
Well first, all of us go to the Gulag for engaging in international capitalist Jewery....second, the government takes over.
i seriously doubt you're a summer associate at an investment bank. speculating brainlessly about "socialism" is the stuff of confused 19 year olds trying (poorly) to be analytical without math
Thanks for the nuanced take Mr. VP
ew. i don't speak to the help. tell your associate if you have anything to say to me.
IU Kelley mf's if Russia takes over
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