What a Mess! Participation as a Simple Managerial Rule to 'Complexify' Organizations

This paper adopts a view of organizations as complex adaptive systems and makes a case for making organizations more complex internally through the use of a fairly simple managerial rule – using participative decision making. Participation in decision making enhances connectivity in organizations, which in turn, gives the organization the opportunity to self-organize and co-evolve in more effective ways than when there is minimal connectivity (i.e., autocracy). The paper uses a specific body of research to support the arguments about why participation can benefit the practice of management in modern organizations.     

The Continuing Continuum Problem of Deposits and Loans

Barnett and Block (J Bus Ethics 18(2):179–194, 2011) argue that one cannot distinguish between deposits and loans due to the continuum problem of maturities and because future goods do not exist—both essential characteristics that distinguish deposit from loan contracts. In a similar way but leading to opposite conclusions (Cachanosky, forthcoming) maintains that both maturity mismatching and fractional reserve banking are ethically justified as these contracts are equivalent. We argue herein that the economic and legal differences between genuine deposit and loan contracts are clear. This implies different legal obligations for these contracts, a necessary step in assessing the ethics of both fractional reserve banking and maturity mismatching. While the former is economically, legally, and perhaps most importantly ethically problematic, there are no such troubles with the latter.     

The rise and fall of the subsistence fund as a resource constraint in Austrian business cycle theory

The “subsistence fund” was once an integral part of Austrian business cycle theory to indicate the resource constraint on the ability to complete investments. Early agrarian and industrial economies were constrained by resource availability in a manner consistent with that alluded to by the subsistence fund. This link became more tenuous as the growth of the financial economy in the twentieth century removed the apparent importance of pre-saved goods to complete investments. At this point the subsistence fund came to be used only as a metaphor and was jettisoned from Austrian business cycle theory. The present paper points to the merits of the subsistence fund in explaining the turning point of the business cycle as compared to alternative explanations. It also works out the deficiencies in historical expositions of the Austrian theory based on the subsistence fund, and traces the evolution of the resource constraint at the core of Austrian economists´ treatment of the business cycle.     

An Austrian Analysis of China's Unsustainable Boom

Austrian Business Cycle Theory can shed light on the ways in which the current Chinese economic boom is unsustainable. On the one hand, government interventions, such as land monopolies, have raised costs for real estate developers. By limiting the availability of investment instruments and access to external markets, government interventions have created a strong demand for housing as a hedging tool. On the other hand, a loose monetary policy and artificially low interest rates have made the property market tempting for developers. Over‐construction and over‐consumption in the housing sector epitomise the capital structure analysis that Austrian economists regard as the core of their business cycle theory.     

Linkages between minority business characteristics and minority banks’ locations

This study presents evidence regarding differences in the financial characteristics of minority business enterprises (MBEs), contingent upon whether or not they are currently located in markets which contain minority banks. We employed Dun and Bradstreet financial data for the period 1975–83. We concluded that, on average, MBES not located in markets with minority banks were larger than the bank-related MBES, laid greater emphasis on fixed assets, and financed their businesses with more equity. The bank-related MBES apparently had greater access to debt financing and operated with greater liquidity.     

QUALITATIVE EASING IN SUPPORT OF A TUMBLING FINANCIAL SYSTEM: A LOOK AT THE EUROSYSTEM'S RECENT BALANCE SHEET POLICIES

Attention has recently been drawn to compositional changes in the Federal Reserve System's asset holdings and in particular the deterioration of the balance sheet of the Fed in the face of the current crisis. However, an analysis of the balance sheet policies of the Eurosystem is still missing. In this article we fill this gap by analysing the Eurosystem's balance sheet during the recent subprime crisis. The calculation of certain balance sheet ratios supports the assessment that a significant decrease in the quality of money has occurred.     

Separating the Wheat from the Chaff: Icelandic and Irish Policy Responses to the Banking Crisis

When the stories of the Icelandic and Irish crises are told, they are framed as if one country did everything right to exit recession and the other country everything wrong. This article assesses their recovery policies and finds that the truth lies somewhere in between. By allowing its banking system to suffer substantial losses, Iceland shielded its citizens from the costly debt overhang apparent in Ireland. Ireland's commitment to open capital markets and price deflation has allowed trade flows to remain robust, and relative prices to realign to signal sustainable production plans to entrepreneurs. These responses provide a roadmap for other small open economies with large financial sectors entering similar crises in the future.     

Replacing Corporate Income Tax with a Cash Flow Tax

We design a parsimonious cash flow tax for Australia and estimate revenue effects. It allows immediate deduction of all capital expenditures, denies deductions of interest payments, and compensates negative cash flows at the same rate and time as it taxes positive cash flows. It allows taxpayer timing choice on implementation over 10 years. It has incentive effects comparable to lowering the corporate income tax rate to zero. It removes distortions that artificially favour debt over equity, short- over long-term investments, rents over competitive returns, large, established over small and new businesses, and conventional over innovative investments. It closes international tax evasion loopholes. Its spur to investment and timing of revenue impacts favours implementation in recession.     

The relationship between land use and surface water resources in the UK

Land use and water resources are inextricably entwined. The need to protect the quantity and quality of water resources can impact potential land uses and land management practices, while water availability is a pre-requisite for land uses requiring irrigation. Land use and land management changes impact on water resources for example through changes in catchment yields, infiltration rates, dissolved organic carbon and nutrient transfers. While there is no absolute shortage of water resources across the UK as a whole, spatial and temporal variations already result in water stress across much of the south and east of England during dry summers. In the future, water stress is expected to become more widespread in response to population growth, increasing environmental protection and climate change. Surface water quality is reported to be improving at present, though there are doubts as to the adequacy of the monitoring coverage. Climate change is likely to adversely affect surface water quality, with less dilution in summer and more extreme rainfalls in winter leading to increased erosion and pollution. To conserve usable water resources, land uses which increase evapotranspiration or rapid runoff should be discouraged, particularly in the south and east, and there need to be continuing efforts to maintain good chemical water quality in rivers and groundwater. Water resource constraints will limit opportunities to use irrigation as a counter to climate change, and will influence where irrigated production can be located.