Business failure and change: an Australian perspective

„h Contrary to common perceptions, most Australian businesses survive for a considerable time ¡V for example, around two¡Vthirds of businesses are still operating after five years and almost one¡Vhalf are still operating after ten years. „h Around 7.5 per cent of businesses exit each year ¡V cessations account for around 80 per cent of exits (changes in ownership account for the remainder) ¡V but most exits are not firm failures. „h Each year, cessations account for, at most, between 9¡V10 per cent of total job losses and 3¡V4 per cent of GDP ¡V however, in net terms, these impacts are outweighed by the corresponding gains from new business start¡Vups. „h Less than 0.5 per cent of businesses exit each year due to ¡¥catastrophic¡¦ failure (bankruptcy or liquidation). The failure rate has fallen significantly in the past decade ¡V the estimated failure rate was 3.6 failures per 1000 enterprises in 1999-00, one¡Vthird of the rate in 1991-92 ¡V the decline is attributable to fewer company liquidations, rather than any fall off in unincorporated business bankruptcies.business failure - small business - business exits - business survival - insolvency - liquidation - bankcruptcy

The Capital Commons: Digital Money and Citizens\u27 Finance in a Productive Commercial Republic

All societies must address two questions where the organization of productive activity is concerned. The first is whether production will be mainly publicly managed, privately managed, or \u27mixed.\u27 The second is whether the financing of production will be mainly publicly managed, privately managed, or mixed. In the American commercial republic, we seem more or less to have answered the \u27who does production\u27 question to our own satisfaction. From the founding era to the present, we have elected to leave production primarily, though not of course solely, \u27in private hands.\u27 Where the financing of production is concerned, on the other hand, we have been more ambivalent. For the past 160 years, our financial system has operated as a public-private franchise arrangement. At the core of our franchise lie the sovereign public (the \u27public\u27 of our \u27republic\u27) and its money-modulator – the issuer and manager of its monetized full faith and credit, its \u27money\u27 – on the one hand, and the private sector financial institutions and markets we publicly license to allocate most of the resultant Wicksellian \u27bank money\u27 or \u27credit-money\u27 on the other hand. At the periphery of the franchise lie those institutions and markets that \u27shadow bank\u27 through relations with the banking core. In recent years, developments in several distinct spaces have prompted what amounts to a broad reassessment of our hybrid financial arrangements. One such development is weariness with our system\u27s penchant for over-generating public credit that fuels bubbles and busts rather than production, a product of leaving our public capital - by far the greater part of investment capital - to private management. This is what the author has long called poor credit modulation. Another ground of critique is our hybrid system\u27s poor record on what the author has long called credit allocation, from which modulation turns out to be inseparable. Our morbid fear of explicitly, rather than implicitly, ‘picking winners and losers’ is the culprit here. Finally, other sources of disenchantment are our system\u27s long-term worsening of inequality, the scandal of commercial and financial exclusion our system permits, and the promise offered by new financial technologies where ending both that and leaky monetary policy are concerned. The current Covid pandemic and recent murder of George Floyd of course underscore these sources of disillusion. This article embraces these critiques, which the author himself has leveled continuously over the past fifteen years, argues that privately ordered production requires publicly ordered finance, and shows how to order finance publicly on a Fed balance sheet forthrightly recognized as a Citizens’ Ledger. New public investments will make up the asset side of the upgraded Fed balance sheet, while a corresponding system of digital public banking through ‘FedWallets’ will upgrade the liability side of the same. Newly restored regional Fed functionalities (\u27Spreading the Fed\u27), an FSOC-inspired National Reconstruction and Development Council (NRDC) and its financing arm (a restored RFC), and a price-stabilizing \u27People\u27s Portfolio\u27 round out the new system of Citizens\u27 Finance. In the course of its arguments, the article traces all salient consequences that flow from its overhaul of our system of financing production, from banking through ‘shadow banking’ to the capital markets. It also makes some surprising discoveries along the way. Among these is that full separation of Fed and Treasury and hence monetary and fiscal policy, itself an artifact of franchise finance and hence the false hope of separating credit modulation from credit allocation, is no longer tenable. Another is that global central bank digital currency (CBDC) development is now corroborating much of what the article argues

Spectrum auctions: designing markets to benefit the public, industry and the economy

Access to the radio spectrum is vital for modern digital communication. It is an essential component for smartphone capabilities, the Cloud, the Internet of Things, autonomous vehicles, and multiple other new technologies. Governments use spectrum auctions to decide which companies should use what parts of the radio spectrum. Successful auctions can fuel rapid innovation in products and services, unlock substantial economic benefits, build comparative advantage across all regions, and create billions of dollars of government revenues. Poor auction strategies can leave bandwidth unsold and delay innovation, sell national assets to firms too cheaply, or create uncompetitive markets with high mobile prices and patchy coverage that stifles economic growth. Corporate bidders regularly complain that auctions raise their costs, while government critics argue that insufficient revenues are raised. The cross-national record shows many examples of both highly successful auctions and miserable failures. Drawing on experience from the UK and other countries, senior regulator Geoffrey Myers explains how to optimise the regulatory design of auctions, from initial planning to final implementation. Spectrum Auctions offers unrivalled expertise for regulators and economists engaged in practical auction design or company executives planning bidding strategies. For applied economists, teachers, and advanced students this book provides unrivalled insights in market design and public management. Providing clear analytical frameworks, case studies of auctions, and stage-by-stage advice, it is essential reading for anyone interested in designing public-interested and successful spectrum auctions