The science of winning in investments, management and marketing Schneider Alexander
Evolution of markets
Evolution of markets
Much research has been devoted to the study of markets. Most of them analyzed the markets of individual industries and can serve as reference material rather than a systematic classification of the evolutionary stages of market development. Some works devoted to general patterns are of interest, reflecting certain characteristic features of markets as a whole. However, there was no unified and convenient for practical use classification of markets that would reflect the stages of market evolution.
To create it, it was necessary to find a fundamental criterion that could be used as the basis for such an evolutionary classification of markets. We have determined that the criterion classifying the stages of market evolution is the distribution of consumers between this market and other markets. This criterion should not be confused with the percentage of distribution of the same market among companies trading on it.
Let's give an example. The air transportation market shares its consumers with the road, rail and sea transportation markets. The percentage of distribution of passenger traffic between these markets depends both on the stage of development of aviation in comparison with other means of transport, and on a number of more random factors, such as the temporary illusion that terrorists will blow up planes but not trains. At the same time, within the aviation market there is a distribution of it between various companies, such as Delta, El Al, Swiss Air, Aeroflot and others. The internal distribution of the market between companies playing on it (market sharing) is not the criterion that will be discussed in this chapter.
We have proposed an evolutionary classification system that divides markets into five groups, corresponding to five successive stages of development. At each stage, markets are characterized by the same:
Goals
Stages of development of companies trading on this market
Stages of technical development of goods sold on a given market
Psychology of buyers
At level zero, the market for consumers who pay money to use the new offer does not yet exist. There are enthusiasts for whom trying something new is a hobby. At their game, a new proposal is born. Users of a market that does not yet exist can be research scientists, for whom testing something new is part of their activity. Tier 0 markets were the telephone or the car at the end of the 19th century, and a hundred years later the Tier 0 market was the early inhabitants of the Internet.
Buyers who actually pay money are already appearing on the first-level market. But they are not leaving the previous market yet. For example, a rich person at the beginning of the twentieth century could already buy a car and demonstratively drive it around the city on a day off. However, the horse continued to be his main means of transportation. He temporarily paid both the gasoline and hay markets. The telephone market found itself in a similar position at about the same time. And the Internet became a first-level market by the early 90s.
The second-level market is characterized by the fact that consumers begin to come to it en masse, leaving the previous market. So, in the 20s of the last century, Americans and Europeans began to switch to cars en masse, leaving cab drivers unemployed. This happened with phones ten years earlier. But the Internet, having entered the stage of the second-level market by 1993, is still there.
It is possible that the number of consumers leaving money in a particular market does not grow, but each consumer begins to use a new product to perform an increasing number of tasks. Moreover, he needs this product more and more often, and he leaves more and more money in this market. This is also a second-level market. For example, before computers, banks and companies used punch card tabulators to calculate salaries and prepare balance sheets. The first large mainframe computers in banks and companies took on precisely this work - that is, compiling balance sheets, calculating salaries, accounting for inventories, etc. But soon, computers entered all areas of the bank's work. Banking consumption of computer markets was constantly growing, but there were no more banks.
The market enters the third level of development when all potential consumers are already taking advantage of the offer of this market and the dynamics of the number of buyers reflects the population growth in the country. Postal services in countries with universal literacy have been a “third-stage” market since the invention of the postage stamp. American cars and the telephone moved into the third tier market in the 1930s. I wonder when the Internet will reach the third stage of the market?
The fourth stage market is the flip side of the second stage market. At the fourth stage of the market, there is an outflow of consumers who begin to use a new offer to replace the existing one. The horse-drawn transportation market moved to the fourth level when the automobile moved to the second. Postal and traditional telephone networks are now entering the fourth stage under pressure from the Internet. The market for cars or saucepans is still far from the fourth stage. And if science fiction writers have already predicted the onset of the fourth stage for cars, then I don’t even want to imagine a world without saucepans.
It is characteristic that the market should not be confused with the companies trading on this market. A company can quickly move from one market to another, sometimes even receiving an additional impetus for development, accelerating the death of its previous market. For example, IBM moved into the personal computer market, hastening the death of the pre-electronic office equipment that it once produced (by the way, information was recently published about IBM's intention to exit the personal computer business). On the other hand, specific companies may disappear even in a thriving market, giving way to others.
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In a traditional society, the bulk of economic goods are not bought or sold, but circulate within the natural economy. Therefore, commodity-money relations that exist in almost any traditional type of society do not form a genuine market system. We should talk about its formation only when the mobilization of resources for production, as well as the appropriation of consumer goods, begins to take place through the market. In Russia, this turn with a certain convention can be attributed to the 17th century. From this period we will begin an analysis of the development of markets in the Russian economy.
IN
Formation all-Russian market
1) creation of a unified monetary system of the country. Until the end of the 15th century. All independent principalities issued their own money. However, as they became subordinate to Moscow, the principalities were deprived of this right. One of the last centers of independent issue of money was Novgorod, which stopped minting only in the middle
2) the formation of the institutional structure of all-Russian trade. From an institutional point of view, the existence of a single market requires
a) subjects of trade relations conducting transactions throughout its territory,
b) nationwide trade centers,
c) developed means of communication.
All these components gradually took shape in the Russian economy. So, in the XVI - XVII centuries. In Russia, the process of initial accumulation of trade (merchant) capital was actively underway. By the end of this period, the merchants had become a special class, officially recognized and supported by the state.
Moreover, the merchants are sometimes even assigned national political functions. Thus, the annexation of Siberia to Russia was carried out as a result of Ermak’s expeditions, carried out with the money of the Stroganov merchants. By the 17th century A system of trade centers - all-Russian fairs - is also emerging. The most important among them were Makaryevskaya (Nizhny Novgorod), Irbitskaya, Svenskaya, Arkhangelskaya, Tikhvinskaya. Fairs were usually held 1-2 times a year and coincided with church holidays. In addition, the capital's Moscow market became increasingly important, attracting flows of goods throughout the year. Finally, in a centralized state, communication routes gradually developed to connect the main cities of the country. Bad roads in the vast country, however, remained one of the main obstacles to the development of a single economic space for centuries;
3) specialization of individual regions of the country in production. Already by the 17th century. In Russia, a relatively strong specialization of regions has developed in both agricultural and industrial production. The north-west of the country specialized in growing flax, the south and south-east - in the production of bread and meat, and the suburban areas of large cities - in vegetable growing and dairy farming. Novgorod, Pskov and Tver were famous for the production of linen, Moscow for the manufacture of cloth, Tikhvin, Serpukhov, Tula for metallurgy, Staraya Russa and Totma for salt making. The mutual exchange of products united the country into a single economic space.
Nevertheless, the process of formation of the all-Russian market proceeded very slowly. For example, only during the reign of Elizabeth Petrovna, customs were abolished within the country (1754), which until then had greatly hampered the movement of goods between the regions of the huge power. In general, in the 18th century. and the beginning of the 19th century. With the further development of the factors already listed (growth of trading enterprises and trade centers, improvement of communications, increased specialization), the degree of unity of the Russian market gradually increased.
A turning point in the formation of the country's single market was the massive construction of railways. If initially railways connected only certain regions, then by the end of the 19th century. The largest centers of the country turned into railway junctions and the whole country was covered with a network of highways. It was from this time that the unity of the Russian market began to manifest itself at the level of current commercial activity. It couldn’t have been otherwise: while the journey from Moscow to Khabarovsk took several months at best, and transportation of meat from black-and-whites that specialized in its production
the transfer of terrestrial provinces and Ukraine to consumers in Moscow and St. Petersburg was possible only in winter - until then, the economic unity of the country could only be relative.
As research by academician I.D. has shown. Kovalchenko, carried out using quantitative methods based on an analysis of price dynamics in different provinces Russian Empire, the final formation of a single market for agricultural consumer goods (and pre-revolutionary Russia was an agrarian country) should only be attributed to the 80s of the 19th century. During this period, price fluctuations for the first time begin to obey a uniform rhythm for the entire country. And the formation of single markets for production factors (land, labor, capital - in agriculture it was primarily draft animals) occurred even later - at the beginning of the 20th century.
Around the same time, the existence of a single market began to be reflected in the results of firms’ activities: agricultural enterprises operating in different provinces gradually formed the same level of profitability. Thus, in the highly competitive agricultural sector of the Russian economy, a mechanism for generating zero economic profit has come into play. This indisputably proves that all enterprises operated in a single economic space.
Russia has entered the 20th century. with a finally established national market. Subsequent turbulent events in Soviet and post-Soviet history periodically led to a narrowing or partial disintegration of the common economic space, but never completely destroyed it.
WITH
Land market
Landowners organized production on the principles of a self-sustaining subsistence economy and were responsible to the state for collecting taxes, performing various (for example, transport) duties, recruiting recruits for the army, etc. Markets for production factors, and primarily the land market, were virtually absent under these conditions. Of course, transactions for the purchase and sale of land occurred periodically, but they only reflected its transfers from one landowner to another, but almost nothing
were based on the use of factors: in the estate, in any case, everything went according to a long-established, traditional routine.
The formation of the land market began after the abolition of serfdom. Since the reform was carried out “from above”, with landowners having a decisive influence on the conditions for its implementation, the main problem of the emerging market for many years was the huge concentration of land ownership in their hands. Of the 219 million dessiatines of landowners' and peasants' lands, 36.2% went to landowners, who made up no more than 1% of the total number of land owners.
Landownership was ineffective in many cases. However, the land passed from them to effective owners only with great difficulty. Huge redemption payments for the land transferred to the peasants helped landowners avoid selling land. Their amount was calculated on the principle of capitalization of quitrents or corvée, previously paid by peasants. In other words, the landowner was due a ransom amount that, if deposited in the bank, would generate an annual income equal to the previous income from quitrent or corvee.
The rural community was also an important factor hindering the development of the land market. Under the terms of the reform, land was allocated not to individual farms, but to the community. And she already distributed the plots between peasant households. 80% of allotment lands ended up in communal land use.
The community was usually not interested in establishing independent farms, since it bore mutual responsibility for the payment of taxes by each of its members. In addition, the communities that did not fully repay the redemption payments for the land (and these were the majority - the redemption process was completed only by 1907) could be influenced by the landowners and the state. For example, the landowner had the right to challenge elders and other elected officials in the community that he did not like.
At the beginning of the 20th century. Due to the unresolved agrarian issue, Russian agriculture entered a period of increasing difficulties. On the one hand, the peasantry suffered from land shortage and poverty. The number of so-called horseless and one-horse farms, actually balancing on the brink of survival, in the European part of the country reached 60% of the total number of peasant households. On the other hand, there remained numerous inefficient landed estates that continued to cling to the land. Show-
An indication of their difficult financial situation is the fact that by 1895 more than 40% of the landowners' lands were pledged.
In general, the Russian agricultural sector was extremely backward compared to European countries. It was necessary to create large capitalist agricultural enterprises using machinery and wage labor, as well as small but financially healthy family farms. A wide range of the most influential opposition parties demanded that this problem be solved by forceful paid (Cadets) or gratuitous (Socialist Revolutionaries, Social Democrats of various shades) alienation of landowners' lands. For the tsarist government, this path was unacceptable for political reasons. And it chose the community as the main object of reform.
The inspirer and promoter of the new agrarian policy aimed at destroying the community was the Chairman of the Council of Ministers P.A. Stolypin. In accordance with the decree of the Stolypin government of 1906, adopted in 1910 by the State Duma as a law, peasants received the right to assign their communal allotment to private property.
An important part agrarian reform Stolypin's resettlement policy also appeared. A whole system of incentives was created for the resettlement of peasants to remote areas - Siberia, the Far East, Central Asia. In new places, each peasant became the sole owner of his land, and the unification of settlers into communities was not allowed. Financial support for the reform was provided by the Peasant Bank.
As a result of the Stolypin agrarian reform from 1906 to 1916, 2.5 million householders were separated from the community. 17 million acres of land became the property of the peasants who left the community. The market development of the village has taken a big step forward.
The development of market relations contributed to the rise of productive forces in agriculture, but due to the remnants of serfdom, this process was sluggish. Russian agriculture as a whole remained extensive; gross grain harvests increased mainly due to the growth of sown areas. Stolypin's legislation did not and could not radically change the semi-feudal agrarian system of Russia, since it left huge landownerships intact. It did not destroy the peasant community either - 75% of the peasants still remained in it. The resettlement policy was not entirely successful: only a minority of the peasants settled in new places, the rest returned or went bankrupt.
It was the unresolved agrarian question that became one of the main reasons for the success of the coming revolution. Bolshevik calls:
“Bread to the hungry!”, “Land to the peasants!”, were close and understandable to the broad masses.
After the victory of the October Revolution, the Decree on Land and the Law on Socialization of Land, which developed it, were adopted, according to which the land was nationalized and then transferred for use to the peasants. In practice, this was expressed in the distribution of landowners' lands to peasants. The distribution of land took place on an egalitarian principle, in proportion to the number of adult family members. By the spring of 1918, peasants' land holdings increased on average by 60% compared to pre-revolutionary sizes.
As a result of these transformations in the first years of Soviet power, the agrarian question was largely resolved, which largely predetermined the victory of the Bolsheviks in the Civil War. Here we should look for the important roots of the rapid restoration of the national economy after the end of the war and foreign intervention. The efficiency of the early Soviet land market further increased during the NEP years, when land leasing and the use of hired labor in agriculture were allowed.
Market relations in the agricultural sector, however, were poorly suited to the implementation of the plans of the Soviet state to carry out accelerated industrialization of the country and build up its military power. The gigantic investment required for this could only be financed by plundering the village. Attempts to seize resources economic methods while maintaining market conditions in rural areas, they have repeatedly failed. For example, in response to the creation of the so-called price scissors - the gap between inflated prices for industrial products and reduced prices for agricultural products - peasants repeatedly responded by refusing to sell bread. And this not only cast doubt on the continuation of gigantic investments in industry, but also created a direct threat of starvation in the cities.
In this regard, further transformations in agriculture followed the path of collectivization. During its course, peasants were forcibly united into production cooperatives or collective farms - a kind of community that was under strict party-state control, and provided - often almost free of charge, for pennies - supplies of agricultural products to the state.
Collectivization was carried out at an emergency pace. In just six months (from July 1929 to February 1930), 14 million peasant farms were united, or 60% of their total number in the country. Complete collectivization was completed by 1933.
During the process of collectivization, successfully working peasants and their farms were destroyed, including physically. Although after the revolution the land was distributed on an equal basis, according to the eaters, after about 10 years it became clear that only a small part of peasant farms were working truly efficiently. It was these peasants who most actively resisted collectivization (which is not surprising: they had something to lose), and therefore were declared by the authorities to be kulaks or sub-kulaks and were deprived of their rights, and their property was expropriated.
Collective and state farms, and through them the state, remained the main owners of land in the USSR until the end of the Soviet era. It was with them in mind that agricultural machinery was designed (for example, heavy-duty tractors, effective only on large fields), agricultural techniques were developed, and populated areas were built. The whole nature of agricultural production turned out to be so closely tied to this system of land tenure that in many features it has survived to this day.
AND
Labor market
Thus, the establishment of a local system of land tenure in a mature feudal society resulted in even greater enslavement and exploitation for the peasants. The landowners, whose holdings were relatively small, were not content with quitrents and, trying to squeeze the maximum possible out of dependent peasants, used corvée more and more widely. The consequence of this was the strengthening of the personal dependence of the peasants and their attachment to the land. Since 1497, peasants could move from one landowner to another only once a year - during the week before and the week after “St. George’s Day” (November 26). Since 1649, the transition of peasants was generally prohibited.
Paradoxical as it may seem, in the future, the gradual maturation of market relations within the framework of the traditional economy went hand in hand with the strengthening of serfdom. This happened because in the new market conditions the landowners were in dire need of funds. If the need for the natural goods that the estate could provide was limited for each nobleman (after all, even the most wasteful owner can spend on himself, his family and guests a relatively modest amount of food - pickles, jams and other simple peasant-made supplies) , then the need for money had no limits.
Landowners sought to maximize the production of agricultural products for sale. Under such conditions, the exploitation of peasants increased sharply. So, in the second half of the 18th century. work for the landowner (corvée) reached 6 days a week. On the most fertile black soil lands, where the labor of peasants brought the greatest income to the landowners, corvée sometimes covered the entire week. At the same time, the peasant’s allotment was taken away, and a beggarly amount of food was given to support himself and his family. This system was called a month and was very reminiscent of slavery.
The growing power of the landowners over the fate of the peasants is also impressive. Since 1736, they were given the right to independently determine the punishment of peasants for escaping. Since 1760, they had the opportunity to punish peasants for offenses using the punitive apparatus of the state - exiling them to Siberia at will or conscripting them (which was sometimes worse than exile - soldier’s life in those years turned into decades of hardship and humiliation). Since 1765, landowners received the right to sentence peasants to hard labor. And in 1767, peasants were also prohibited, under threat of exile, from complaining to government authorities about their landowners. Catherine's age of enlightenment, which officially proclaimed Russia's transition from barbarism to European civilization, at the same time, in the most cynical way, took away the last remnants of human rights from the majority of the country's population.
A similar process took place in industry. In manufacturing production of the 17th-18th centuries. Hired labor of free citizens was quite widespread. However, the intensive imposition of industry by the state in the Peter the Great era and subsequent decades caused a noticeable regulation in the labor market.
press: the depletion of hired labor resources led to the use of forced labor. Villages began to be created at factories - factory owners received the right to assign serfs to the enterprises, who were forced to work at the factories.
However, even under serfdom, the labor market gradually developed. At the end of the 18th and beginning of the 19th centuries. he relied on two main sources of personally free workers: a) city dwellers and b) state-owned peasants who belonged to the state and were officially called “free rural inhabitants.” State-owned peasants could relatively freely choose their occupation: conduct agricultural production (since 1801 they even received the right to buy land), engage in crafts in the countryside, or move to the urban class.
By the middle of the 19th century. There were about 6 million city dwellers in Russia. The number of state-owned peasants and appanage peasants who enjoyed somewhat less freedom (the latter belonged personally to the royal family) was about 21 million people. Thus, about a third of the country's population had varying degrees of personal freedom. From the point of view of labor relations, it is also important that even the serfs sent by the landowner to the city to earn money, although they paid him a monetary dues, acted in the labor market as
civilian force.
As a result of the reform of 1861, all peasants received personal freedom, the right to dispose of their property, buy and sell real estate, and engage in commercial and industrial activities. The labor market of the first post-reform decades, if not a market of perfect competition, had noticeable similarities with it. The unorganized mass of former serfs, who were actively moving to the cities, were opposed by equally unorganized employers - small industrial and trading firms that made up the Russian economy at that time.
However, cases of local monopsony were also widespread. For example, many villages and cities in the Urals arose on the basis of one plant and were initially inhabited by serfs assigned to it. After the abolition of serfdom, workers received personal freedom, but this changed little in their relationship with the plant. The position of sole employer still gave its owners enormous power over workers.
At the end of the 19th - beginning of the 20th centuries. The situation on the labor market became further complicated due to the emergence of large enterprises and the formation of their oligopolistic associations (syndicates). The situation of unilateral monopsony began to spread more and more throughout the country. A worker who acted on the labor market as a lone individual was unable to defend his rights in confrontation with the whole
industrial empire. Naturally, this situation did not contribute to class peace in the country, but, on the contrary, caused massive anger among the working people.
The counterweight to monopsony - trade unions - were officially banned in Russia and therefore began to be created very late - only during the revolution of 1905. But their formation was of an avalanche nature. By the beginning of 1907, there were 652 trade unions operating in the country, and the number of their members reached 245 thousand people. After the defeat of the revolution, trade unions began to be persecuted. Although they were not formally banned again, the number of their members had dropped to 19 thousand by 1909. A new rise in the trade union movement occurred after February Revolution and the removal of all restrictions on trade union activities. By October 1917, trade unions had more than 2 million members.
Having emerged in an environment of acute social upheaval, Russian trade unions were highly politicized. The greatest influence in the trade unions was enjoyed by different movements of socialists: the Bolsheviks, Mensheviks and Socialist Revolutionaries. It is not surprising that strikes and other actions organized by trade unions often took place not only with economic, but also with political demands.
After the October Revolution, trade unions gradually lost their independent significance. During the difficult years of the Civil War, when the situation of workers deteriorated sharply, the new government decisively suppressed the attempts of some trade unions to defend the economic rights of their members (for example, to hold strikes demanding higher wages). After the end of the debate on trade unions in the Communist Party in 1921, such activities began to be effectively equated with counter-revolutionary activities and were severely punished.
The new role of trade unions in a socialist economy was more like the activities of a government department responsible for socio-cultural work with workers. However, the rights of trade unions in this regard were quite broad and provided (especially in the late Soviet era) quite large social benefits to workers: material assistance in emergency situations, free or discounted vouchers to rest homes and sanatoriums, subsidies for the activities of kindergartens and pioneer camps, travel on transport, etc.
Changes in the activities of trade unions represented only one and far from the most important side of the overall changes in the labor market in Soviet times. The main essence of the changes was the gradual formation of total state monopsonism. In contrast to market monopsony, which in the most extreme case covers only one industry and, as a rule, balanced by the opposition of a powerful trade union,
In favor, socialist monopsony extended to the entire economy and had no costs. Working conditions and the level of remuneration under socialism were almost unilaterally determined by the state, which officially proclaimed as its goal the growth of the well-being of workers, but for decades paid them lower wages.
However, from the point of view of the employed, state monopsony also had advantages over private capitalism. Unlike the latter, it did not lead to an artificial reduction in the demand for labor. On the contrary, as always happens in a resource-constrained economy, the demand for labor usually exceeded the supply. In the USSR, unemployment was eliminated during industrialization, when the need for workers for the construction and operation of massively created industrial enterprises involved all the country's available labor resources in production. In 1931 the labor exchange closed.
A positive consequence of these processes was confidence in the future (i.e., the disappearance of the fear of becoming unemployed and the opportunity to plan one’s career for many years to come), a negative consequence was a sharp weakening of work motivation.
Subsequently, the most important characteristic of the Soviet labor market was the constant shortage of labor resources. At the same time, wages were maintained at a reduced level. And the state monopsony, combined with restrictive measures of a non-economic nature (registration registration, forced distribution of university graduates, mandatory party decisions for members of the CPSU, of which many qualified specialists were), significantly reduced personal freedom in choosing a place of work.
R
Capital market
A feature of organized financial markets, which include stock exchanges, is their relatively late development in our country. The first stock exchange was opened on the initiative of Peter I in St. Petersburg in 1703. But until the 20s of the 19th century. it performed the functions of only a commodity exchange, and only from that time on did government loan bonds and shares of private enterprises first appear in its circulation. Later, the Moscow, Warsaw, Riga, Kharkov and Odessa stock exchanges took over stock transactions. The separation of financial transactions from commodity transactions dates back to 1900, when a special stock department was created at the St. Petersburg General Exchange for trading in securities and currencies.
The bulk of transactions on Russian exchanges were carried out with government or government-guaranteed securities. Thus, in 1913 they accounted for 72% of the total stock turnover of the St. Petersburg Exchange. As for private enterprises, transactions were actively carried out with shares of 112 companies out of a total number of approximately 5 thousand joint-stock companies operating in the Russian Empire. In total, transactions with shares of private firms accounted for only about 9% of exchange turnover.
Thus, there are clear signs of weakness in the pre-revolutionary financial market. The resources of free capital, already limited due to the backwardness of the country, were almost completely absorbed by the needs of financing the state budget, and only crumbs were sent to the economy (this picture was exactly reproduced about a century later in the new Russia). Another sign of weakness was the enormous role that foreign (in particular, the Paris) stock exchanges played in the placement of shares of Russian enterprises. It was easier to find money to organize a large business abroad than within the country.
The pre-revolutionary financial market in Russia was characterized by strict government regulation. In particular, until 1893, forward transactions, which were actively practiced in other countries, were prohibited on exchanges in order to avoid speculation. The circle of persons directly admitted to making transactions on the stock exchange was strictly limited. It included only representatives of large banks and the Ministry of Finance. For the accuracy of compliance with exchange rules, brokers bore strict liability, even criminal liability.
During the First World War, exchange activity decreased sharply, and during the Civil War it practically ceased. In the USSR, stock exchanges were revived during the NEP period. In 1921-1922 About 100 exchanges opened, the largest of which began to operate stock departments again. They were used for transactions in currency, government securities, government trust bonds, and shares of private enterprises.
Nevertheless, the NEP exchanges no longer had their former role. Large state trusts, transferred to commercial settlement, turned directly to state banks for the financial resources they needed. The role of the exchange was therefore reduced mainly to establishing quotes, i.e. prices for attracting capital, which were then guided when concluding transactions outside the exchange.
With the collapse of NEP in 1929-1930. the exchanges were closed. For decades, the movement of capital in the country began to be determined by direct government financing of investments, as well as bank lending, which often became synonymous with the same direct financing due to non-repayment of loans. As an example, let us refer to the repeatedly repeated procedure of writing off the debts of collective farms.
1One of the main trends in the development of economic systems is the tendency to expand the spheres of activity, their systemic integration, which is most clearly manifested in the concept of globalization of the economy. Globalization is the root cause of the formation of structurally complex economic systems in the form of integrated business groups, such as corporations, holdings, consortiums, conglomerates, cartels, syndicates, trusts and others. The most widespread integrated business groups are financial-industrial groups, transnational corporations, and international joint ventures.
Analyzing current trends, many authors show that the globalization of the economy poses new problems for the governments of different countries. They see one of the main problems as follows. Modern systems corporate governance was formed during a period when the flow of capital, goods and labor across borders was of low intensity. Today, efficient corporations for which state borders are not obstacles to production are becoming leaders in the international market. By breaking production into several business stages, they place individual stages based on resource costs and income tax rates not only in different regions of the same country, but also in different parts of the world. This allows you to increase production efficiency, minimizing costs and maximizing profits. The optimal allocation of capital mainly determines the trajectory of investment flows and increases competition for their receipt not only between companies, but also between countries. By expanding access to external investors, increasing the transparency of the activities of their companies and strengthening the position of shareholders, they enter international capital markets, where countries developing market economies - India, Brazil, Greece, countries of Eastern Europe, the CIS - compete with developed countries - Germany, Italy, France , in which bank capital plays a more significant role than share capital.
Another important aspect of globalization is the creation of highly mobile medium and small companies in the form of small diversified corporations, equipped according to the standards of a modern electronic office. Such companies are low-cost and can, if necessary, quickly expand their activities in different countries. Thus, globalization creates favorable conditions for accelerating the pace of development of not only large, but also small and medium-sized businesses.
In the context of globalization, information plays a special role. Insufficient or unclear information can impair a company's strategic management, negatively impact the cost of capital, and lead to abnormal resource allocation. Users of financial information, including market participants, need information about significant risks that can be predicted within reasonable limits. At the beginning of the 21st century, the leading world powers are realizing the possibilities of a new, softly establishing global information technological order. They accelerated their socio-economic development and concentrated their efforts on developing an information economy. At the same time, as we know, new problems have emerged. The rapid growth and significant increase in the role of currency and stock markets of the “virtual” economy has significantly increased the likelihood of a crisis in the financial system of individual countries of the world.
When studying hierarchical self-regulatory organizations, we, as a rule, deal with complex processes, so it is fundamental to consider such systems, the organization of which involves, firstly, specialization based on the division of labor, that is, the autonomy of processes and, secondly, cooperation. Developed forms of cooperation are simple and complex. In contrast to simple cooperation as cooperation of equal labor, characterized by “simultaneous” actions, complex cooperation is cooperation of divided labor, various types activities. Cooperation processes are associated with the formation of market models. The main market models in relation to our research are 4 classical market models, although in the literature you can find a wide variety of models, identified depending on the purpose of the study pursued by the authors.
The first market model described by K. Marx, F. Engels, V.I. Lenin, is a self-regulating free market. Such a market existed from the 15th century to the end of the 19th century, and its peculiarity was the absence of state enterprises and the participation of only private organizations and corporations. The second market model is the monopolistic market, which formed at the turn of the 19th and 20th centuries and was characterized by the emergence of joint stock ownership through the horizontal integration of large enterprises in the form of monopolistic associations in one industry. The forms of horizontal integration were cartels, syndicates, and trusts. Forms of vertical integration are concerns and consortia. The third market model was the regulated industrial market, the fourth model was the information market, characterized by strategic planning, integration of production systems, the creation of transnational corporations and the globalization of all processes in general. The conducted research allowed us to conclude that the evolution of market models is an element of global evolutionary processes (Table 1).
Table 1. Coordination of market models and evolutionary processes
The unification of market participants into integrated self-regulatory structures will ensure self-organization only if all connections in the hierarchical system during its organizational design are determined correctly and the processes ensure a stable coordinated movement of inventory, financial and information flows in the system. The most common approach in practice to managing structurally complex self-regulatory organizations is an approach based on the principle of a rational combination of centralization and decentralization, expanding the rights and responsibilities of those making management decisions regarding autonomously functioning market participants while simultaneously limiting their freedom of choice at the stage of solving the problem of strategic management .
The correct cross-level division of the global task of managing a self-regulatory organization allows us to understand, design and obtain a system of decentralized management with a high synergistic effect. Research shows that the property of system integrity - emergence, synergetic effect, homeostasis does not arise by chance, but in accordance with system laws. This confirms the high importance of the theory of systemic organization. The task of searching for general patterns in processes evolutionary development self-regulatory organizations and methods for designing sustainable structures of decentralized management is one of the most complex and pressing tasks of scientific research.
In order to move further in our research, we will consider and analyze in detail the essence of the processes of self-organization and self-government. We adhere to the positions of E.A. Smirnov, considering the processes of self-organization and self-government to be natural processes inherent in living and inanimate matter, which “civilization, as a result of evolution, has placed under formalized hierarchical processes at the level of state, municipal and other corporate governance.” By self-government we mean the autonomous functioning of a socio-economic system that fulfills the need of individuals and organizations for freedom of choice in their activities. In self-government, the hierarchy of subordination is either absent or weakly expressed, in contrast to formalized management. Self-government presupposes freedom in choosing goals, forming corresponding tasks, developing technologies and methods for solving them. Moreover, this process is an element of democratization general management through the direct participation of members of the workforce in the development of current and operational decisions of the company, its development strategy and other equally important issues. Self-government compensates for part of the management area not covered by a formalized management system, and initiates the development of not only artificial (formal) management, but also the organization as a whole. “Self-organization can be considered both as a process and as a phenomenon. As a process, self-organization consists of the formation, maintenance or elimination of a set of actions leading to the creation of sustainable production and interpersonal relationships in a team based on the free choice of accepted rules and procedures...”
The activity of the decision maker (DM) is to obtain a useful result from the object he controls. The useful result we have identified is a function of combining the resources and knowledge of the decision maker within the organizational structure. The use of the potential capabilities of the decision maker largely depends on the external conditions of the activity of the object he manages. The activities of a decision maker located in a certain position of the hierarchy are influenced by the structural parameters of the management system: the order of subordination of hierarchy levels, information exchange and control, depending on which the decision maker has different freedom of choice in decision making. If the decision maker is strictly limited in his actions aimed at implementing the functions of the system, then the importance of the degree of self-government for his activities is very small. A change in the operating conditions of a decision maker may entail a change in his freedom of choice, and therefore the degree of self-government as part of general management.
In this case, the following four cases are possible:
- In the case of “stability,” the transfer of “defects” in the composition of centralization, decentralization and self-government of the lower level to the upper level is suppressed.
- In the event of a “catastrophe,” any “defect” in the composition of centralization, decentralization and self-government leads to the destruction of the system.
- In the case of “unstable criticality”, it is equally likely that the “defect” of the composition will either be suppressed or not.
- In the case of “self-organized criticality” with a fixed initial density of “defects” in the composition of formal and informal systems, the density of defects stabilizes with increasing level.
The new approach we have considered to the paradigm of global evolutionary processes allows us to identify the cyclical stages of development of hierarchical systems and the corresponding processes of change in power (Table 2).
Table 2. Evolutionary processes and the state of the organizational system
The most concrete example of the coordination of the cyclical stages of management evolution that we have identified and the corresponding processes and states of the system can be the main stages in the formation and development of Russian statehood, since the existence of the state as an organization always leads to a hierarchy of power. As noted by the famous Russian political scientist A.A. Radugin, “starting from the period of early class societies, the state as a form of social organization was the most widespread and directly observable phenomenon...”.
In the process of transition to a market economy, Russia intensively went through the stage of free competition, the characteristic tendency of which was the fragmentation of large production associations and enterprises (the process of self-organization). The genetic basis of this process is specialization, which gave rise to some isolation of enterprises and turned them into primary production cells of the economic system (decentralization process). Over the past two years, the behavior strategies of Russian companies have changed dramatically towards intensifying the development of integrated business groups and their capture of new markets. The modern Russian economy is a structurally complex dynamic system with a huge number of explicit and implicit connections between economic elements. According to the definition of the modern economic dictionary, direct economic relations appear as “a form of industrial relations between organizations and enterprises, implemented on the basis of direct contractual contracts between participants, without the involvement of government, interdepartmental and other intermediary structures.” Through a system of economic relations, the unification of several business units into a single vertically integrated business group is achieved (centralization process). In the conditions of vertically integrated business groups as hierarchical organizations, economic relations are internally characterized by the planned nature of formation and action. One of the important problems of a market economy is the establishment of long-term economic ties for the supply of products and the strengthening of economically beneficial relationships for the enterprise, which must be resolved within the framework of territorially organized systems. This will lead to the effective development of interregional ties.
The intellectualization of society and the introduction of new technologies should ensure constant and continuous growth of the economy, sustainable development of all industries, and then Russia will not remain in the world economy only as a supplier of raw materials. Structural reforms and economic dynamism will make it possible in the long term to observe not only economic growth, but also help reduce inflation and increase household incomes only if the approach to management is systematic.
LITERATURE
- Smirnov E.A. Organization theory. - M.: INFRA-M, 2002.
- Political science / Scientific editor. A.A. Radugin. - 2nd ed. reworked and additional - M.: Center, 2001.
The work was presented at the II scientific conference with international participation “Economic Sciences. Current problems of fundamental research" (Egypt, Hurghada, February 22-29, 2004)
Bibliographic link
Mamchenko O.P. EVOLUTION OF MARKET MODELS AS AN ELEMENT OF GLOBAL EVOLUTIONARY PROCESSES // Advances in modern natural science. – 2004. – No. 4. – P. 183-185;URL: http://natural-sciences.ru/ru/article/view?id=12624 (access date: 12/20/2019). We bring to your attention magazines published by the publishing house "Academy of Natural Sciences"
Theoretical foundations of the concept of “market”
The market is one of the most common categories in economic theory and business practice. This category has many different interpretations both here and abroad.
This concept also includes a purchase and sale agreement; and the set of business transactions carried out in a particular area of the economy or in a particular location; and the state and development of supply and demand in a specific area of the economy (for example, they talk about a decrease in prices on the metal market or a shortage in the labor market); and the junction of demand and supply of goods, services and capital. All these (as well as others) definitions of the market have the right to exist, since they characterize certain aspects of this complex economic phenomenon.
Market evolution
market evolution Marxist state
The presence of a large number of definitions and interpretations of the content of the category “market” is associated with the development of social production and circulation.
Initially, the market was considered as a bazaar, a place of retail trade, a market square. This is explained by the fact that the market appeared during the period of decomposition of primitive society, when exchange between communities became more or less regular, only taking the form of commodity exchange, which was carried out in a certain place and at a certain time. With the development of crafts and cities, trade and market relations expand, and certain places and market squares are assigned to markets.
As the social division of labor deepens and commodity production develops, the concept of “market” acquires a more complex interpretation, which is reflected in world economic literature. Thus, the French economist-mathematician O. Cournot (1801-1877) and economist A. Marshall (1842-1924) believe that “a market is not any specific market area in which objects are bought and sold, but in general every a region where the transactions of buyers and sellers with each other are so free that the prices of the same goods tend to equalize easily and quickly.” This definition preserves the spatial characteristics of the market, and the main criterion is freedom of exchange and price setting.
With the further development of commodity exchange, the emergence of money, commodity-money relations, the possibility arises of a break in purchase and sale in time and space, and the characterization of the market only as a place of trade no longer reflects reality, because a new structure of social production is being formed - the sphere of circulation, which is characterized by the separation of material and labor resources, labor costs for the purpose of performing certain functions specific to circulation. As a result, a new understanding of the market as a form of commodity and commodity-money exchange (circulation) arises. This understanding of the market is most widespread in our economic literature. The textbooks indicate that the market is an exchange organized according to the laws of commodity production and monetary circulation. Ozhegov’s explanatory dictionary gives the meaning of a market as: 1) the sphere of commodity circulation, trade turnover and 2) a place of retail trade in the open air or in shopping arcades, bazaar.
The market can be viewed from the perspective of the subjects of market relations. In this case, the market is defined as a set of buyers (F. Kotler “Fundamentals of Marketing”) or any group of people entering into close business relationships and concluding large transactions regarding any product. The English economist W. Jevons (1835-1882) puts forward the “closeness” of relationships between sellers and buyers as the main criterion for defining a market. He believes that a market is any group of people who enter into close business relationships and enter into transactions regarding any product. This definition of the market is characteristic of the marketing concept. However, the complex mechanism of the market includes not only buyers, but also producers and intermediaries. In addition, the above definition of the market does not take into account the reproductive aspect of the market characteristics.
With the growth of production, a natural need for additional labor arises. A person has the opportunity to “sell” his labor, skills, and abilities. At this time, the labor market begins to take shape, and therefore the purchase of not only means of production, but also labor becomes an integral condition for the existence and development of production. The concept of “market” is expanded to understand it as an element of reproduction of the total social product, as a form of implementation, movement of the main components of this product. A definition of the market appears as a way of interaction between producers and consumers, based on a decentralized, impersonal mechanism of price signals (24, p. 82). This definition of the market as a set of specific economic relations is characteristic of Marxist methodology.
The study of the structure of the financial market requires a detailed study of the role and functions of this element of the economy in the context of economic thought, the development of which contributed to the emergence of new concepts of the financial market.
The financial market did not occupy a central place in economic theory until the emergence of the concept of “factors of production.” Let us note that initially the concept proposed by V. Petty in the 17th century included two main factors of production: land and labor 3 . Already in the middle of the 18th century, physiocrats, in particular F. Quesnay 4 and J. Turgot 5, identified capital as a factor of production: in their understanding, capital was not only money, but also means of production that ensure the production process. It is noteworthy that the physiocrats emphasized the possibility of reproducing capital by renewing it with the help of profits received. Recognizing the need for capital in production processes, J. Turgot also pointed out the strategically important role of the interest rate at which the required amount of borrowed capital was provided. Classical economists, including A. Smith and D. Ricardo, supplemented this concept with details indicating the problems of distribution of these factors in the price of the manufactured product.
The classical production function was presented as a function of two factors - labor and capital. After the marginal revolution of the late 19th century, it was supplemented by neoclassical economists. I. Fisher, in his works “Capital and Income” (1906) and “Interest Rate” (1907), designated the equivalence of capital and investment, using the concept of cash flows over time and marginal efficiency, and designated the production function as a function of investment and labor 1 .
K. Marx’s opinion about capital is very interesting: externally presented as means of production (constant capital), workers (variable capital), money (monetary capital), goods (commodity capital), capital becomes a special type of production relations. Karl Marx was one of the first economists to highlight the problem of using credit resources in economic growth. Criticizing the capitalist production system, he made a huge contribution to the development of the theory of economic crises and cycles 2. Economic growth through credit financing would later be the focus of attention of such famous economists as E. Böhm-Bawerk (the effect of forced savings and the problem of excess investment), J. A. Schumpeter and F. A. Hayek (theories of business cycles). Despite the fact that these economists, representatives of the Austrian School of Economics, did not entirely agree with the views of K. Marx, they recognized the existence of some of the problems he described. At the beginning of the twentieth century, economists not only represented the financial market and the banking system as an important element of the economy, but also had a definite opinion about the influence of this element on the price level and other macroeconomic parameters.
Evolution of the financial market. Due to the ambiguity of approaches to the segmentation of the modern financial market and the content of its functions, it is advisable to study this market in the context of economic development. The progress of economic relations stimulated the development and complication of the financial market, the modification of its functions, which can be traced using a historical approach.
The main catalyst for the development of financial relations and the financial market in the ancient world and in the ancient era (3000 BC to the 5th century AD), as well as within the feudal era and the period of mercantilism (5-17th centuries), was the need for trading capital: the first financial intermediaries performed exchange functions and, as a rule, financed transactions related to trade. During the Middle Ages and the Renaissance, trading exchanges and trade research companies were created, which also contributed to the development of the financial market. Within the framework of the capitalist formation (XVIII - second half of the XX century), the need for commercial capital as a catalyst for the development of the financial market was supplemented by the need for productive capital: the construction of railways and various large-scale projects required the attraction of large capital and new forms of financing. A large number of financial innovations in the history of the financial market are associated with the post-industrial period, starting from the second half of the 20th century, when the need for speculative capital was added to the already existing catalysts for the development of the financial market to expand the boundaries of activity and obtain excess profits.
The evolution of the financial market and the change of formations occurred gradually and smoothly.
IN ancient period(from 3000 BC to the 5th century AD), the need for trading capital contributed to the creation of simple financial and credit relations, which allowed the emergence of a money market. The development of law in Ancient Rome in the ancient era provided the conditions for the creation of the first joint-stock companies, the market for equity instruments, namely the over-the-counter market for the first shares, and the first banks. Mention of the first derivatives contracts also suggests the emergence of the derivatives market.
Despite the fact that slavery limited the development of economic and financial relations, even in ancient times the development of trade and production created the preconditions for usury and lending, the emergence of the first securities and financial regulation. For example, in ancient Israel there was a fixation of interest rates when issuing loans (only for local residents) 1, which indicates the development of the loan market and the emergence of the first attempts to regulate the functioning of this market.
The history of finance, lending and securities goes back to Mesopotamia, where 2 thousand years BC. e. there were already forward transactions similar to modern derivatives transactions. In 1920, British archaeologist Leonard Woolley, while excavating in Mesopotamia near the city of Ur, discovered an entire area ancient city, which served as a place for making transactions of various kinds: a large number of clay tablets recorded mutual settlements between buyers and sellers, including unique fixed-term contracts. The study of the tablets made it possible to draw conclusions about the existence of a credit market in Mesopotamia at the time of 1796 BC. e., when a certain Dumuzi-Hamil, the ancient prototype of modern bankers, gave loans at various rates (one of the fixed rates was 3.78% per annum) for a period from several months to 5 years 1. The credit market performed some of the functions of the modern money market: the price of money (silver was the main means of payment at the time) and the supply of money in the economy were regulated in a decentralized manner by financiers such as Dumuzi-Hamil. The ancient monetary market of Mesopotamia, which functioned more than four thousand years ago, can be considered the prototype of the modern money market based on the similarity of functions and nature of transactions.
Within the framework of the ancient period, such financial instruments as checks and insurance appeared in Ancient Greece, paper money and fixed-term contracts in China, annuities and shares in Ancient Rome.
Of particular interest are the financial intermediaries of ancient Greece and Rome. In the 6th–5th centuries BC. e. In ancient Greece, “trapes” began to appear, wealthy individuals who not only issued loans at interest, but also accepted deposits, profiting from the difference in rates. Temples also acted as financial intermediaries, performing similar functions. The development of Roman economics and law brought financial intermediaries to the next stage of development: they were divided into “Argentarii” (“argentarii”) and “mensarii” (“mensarii”). While the "Argentarii" were no different from their Greek counterparts, the "mensarii" were in fact the first public banking institutions regulated by the state 2 . Typically, mensaria functioned as a state- and treasury-authorized collateral financing authority, particularly in times of crisis and disaster, to maintain financial stability. Their appearance was first recorded in 352 BC. e. 3. The main functions of Roman banks should be highlighted: “permutatio” - currency exchange and valuation of currencies (“probatio nummorum”), deposits and loans, “perscriptio” - payment orders and checks, “solidorum venditio” - the right to purchase minted coins for their further circulation in the economy. Ancient financial intermediaries formed boards, and their activities were strictly regulated. During the Roman Empire, “mensarii” were subordinate to city prefects, which allows us to classify these organizations as the first state banks, which became the prototype of central banks.
Roman “Societas Publicanorum” (open societies), the existence of which was recorded as early as the 1st century BC. e. Cicero, were joint-stock companies, the shares of which, known in those days as “shares of joint-stock companies” (“partes societatum publicanorum”), served as the prototype of modern shares, but were limited in rights 4. It is worth noting separately that these shares were traded over-the-counter.
Financial science developed rapidly: already in the 5th century AD. e. Indian mathematician Aribata proposed formulas for calculating percentages, laying the foundations for the further development of financial science.
Based on historical evidence, it can be argued that the development of the financial market began with the money market. In ancient times, before the establishment of feudalism in medieval Europe, there was a functioning monetary market, which participated in the formation of the price of money and the supply of money in the economy. However, the financial market and its participants were not institutional, and the circulation of instruments was not exchange-traded.
Feudal formation associated with the creation of the first exchanges, large international joint-stock companies, the introduction of a number of financial innovations and the formation of the debt securities market. It was during the era of feudalism and early merchant capitalism, known as mercantilism, that all segments of the financial market were finally formed. Its further development is associated with qualitative changes within these segments.
Development international trade, especially between East and West, stimulated in turn the development of complex algebraic calculations, which created the basis for various financial innovations. Feudal wars, expeditions, large-scale state projects required financing, which could only be provided by a multi-level system of financial redistribution.
In China, during the Tang Dynasty (618−907) 1, presumably in the 8th–19th centuries, due to a shortage of copper for the production of coins and colossal government expenditures, the government began to issue paper money, which was soon dubbed “flying” because of its light weight. Paper money, issued by monetary authorities and recognized as legal tender, later came to be used throughout the world.
The evolution of the financial market continued despite the obstacles introduced by various religions. Usury was especially condemned in Christianity: for example, Gratian’s decree dated 1140 sharply condemned credit relations, for which, after the decision of the Third Lateran Council (1179), a person could be excommunicated. The weakening of pressure on financial and credit relations on the part of the church occurred gradually, as the degree of influence of the church on the economy and public life decreased.
Trade between Europe and the East made a significant contribution to the development of financial relations. In medieval Italy, government bonds appeared in the 12th–13th centuries. In the mid-12th century, the Venetian government issued the "donec pecunia imprestata restituatur", a government bond with an interest rate of 5% and varying terms; the financing of wars, the maintenance of the fleet and other government expenses were financed by the citizens of the city-state, in some cases this was done by force 2 . Government bonds were used in Genoa, Florence and other city-states, which used this instrument to finance consolidated public debt. The period of the early Middle Ages is associated not only with the appearance of the first government bonds, but also with a new understanding of finance: as a result of the complication of government finances, humanity was faced with such phenomena as inflation, mentions of which date back to the early Middle Ages 1, financial fraud, defaults and government budget deficits , in the modern sense.
A significant foundation for the further evolution of the financial market was created thanks to theoretical financial science.
The first financial-algebraic textbook, created in Italy in 1202, deserves special attention: “Liber Abaci” talked about discounting costs, calculating interest, determining prices for assets and dividing profits 2 . Some scientists argue that financial science was borrowed by Europeans from the Arab world (the so-called “Islamic capitalism” of the 8th–12th centuries) 3 .
The development of the money market within the framework of feudalism is associated with the introduction of regulation - in the Middle Ages, issues of financial globalization and financial protectionism already existed. For example, in Florence, foreigners could not (or could, but with restrictions) purchase government bonds. Medieval governments managed public market debt while trying to avoid external borrowing. The money market was divided into primary and secondary. The secondary market carried out over-the-counter market trading of bonds.
In the 13th century, transferable bills of exchange appeared in Italy, which already in the 14th century began to be actively used in England and other countries in settlements between merchants. The emergence of the concept of “draft”, or bill of exchange, is associated precisely with this period.
During the reign of Philip the Honest in France from 1264 to 1314, the first state-regulated brokers, “courratiers de change,” began to appear to manage the debt of agricultural communes. Centralized exchange trading of debt instruments became widespread thanks to the Belgian House Van der Beurze: in Antwerp and Bruges at the beginning of the 14th century, the first institutional trading platforms, in the modern world known as exchanges, were opened. They traded commodities, various contracts, securities and other financial instruments. The emergence of official exchanges in Antwerp (1460), Lyon (1506), Toulouse (1540), Hamburg (1558), London (1571) made it possible to transfer trading of various assets to the exchange level using established standards and clearing.
In the late Middle Ages, significant changes took place in banking, which in the early Middle Ages was oppressed by church tenets. Founding of an exchange and deposit bank in Barcelona ( Taula del Cambi assegurada de la Ciutat) in 1401 and the Bank of St. George in Genoa ( Banco di San Giorgio) in 1407 are associated with the transition of banks into the category of modern financial intermediary institutions with a complex management system. Commercial banks opened in Italy, Spain, Germany, France and other countries, but it was the Bank of St. George that was the first public bank created and functioning on a permanent basis not only to maintain money circulation, but also to refinance and manage public and private debts, as well as the issue of debt financial instruments. Thus, the Bank of St. George can be considered the next evolutionary step of the ancient Roman “mensarii”, since it had a number of significant organizational differences and more complex functionality. It is noteworthy that it was during this period that the term “bank” itself appeared in Italy (“banco” and “banca rotta”, which means “bench” and “broken bench”, respectively).
The Bank of St. George consolidated public debt and marketed luoghi bonds, organized a scripta line of credit for the municipality of Genoa, pioneered the discounting of paghe government bond coupons, and formally cleared bills of exchange. These innovations were introduced gradually; For example, discounting of paghe coupons on government bonds only became official in 1456, when Pope Calixtus III officially authorized discounting of coupons on debt instruments.
Although the first public banks were founded in ancient Rome, this period is characterized by significant innovations in the field of financial markets, which made the Bank of St. George one of the first banks of a new generation. Banks of the late Middle Ages are a logical continuation of the development of banking, interrupted by the collapse of Western Rome and several centuries of church prohibitions on financial activity.
Feudal relations created the preconditions for the development of merchant capitalism. Progress in Arab and European financial science, the qualitative evolution of the money market as the first segment of the financial market in history and the emergence of the first exchanges and modern banks became the main achievements of the period of the 11th–16th centuries. The economy of early capitalism, or mercantilism, required the further development of finance and the financial market.
Mercantilism period(early capitalism) is characterized by the emergence of clearing for contracts concluded between merchants and financiers. At various fairs, and then on exchanges, clearing contributed to the settlement of transactions and the provision of guarantees, which in turn created the preconditions for the development of financial innovation and the derivatives market. For example, one of the contracts concluded in 1542 indicates that two merchants indicate different exchange rates in the contract, and the one whose value is further from the market rate will pay the opposite party the difference between the indicated and the actual value 1. This example is a prototype of a modern interest rate (or exchange rate) swap, in which it is not the amounts themselves that appear, but the financial flows associated with the specified amount and certain factors, such as the interest rate or exchange rate.
In 1537 and 1539, the Holy Roman Emperor Charles V issued a series of decrees that allowed the resale of contracts to third parties, which contributed to the further development of the securities market 2. Note that Charles V is also known as the author of a number of restrictions on speculative transactions. Historical facts confirm that at the end of the 16th century, government bonds to bearer were already circulating in the Netherlands and other European countries. The prototypes of modern derivative instruments, forwards, futures and options, appeared.
In the 17th century, a number of events occurred that indicate the emergence of early merchant capitalism: the emergence of large joint-stock companies, central banks, improved regulation, and the development of monetary policy and financial science. The main factor in the development of the financial market continued to be the complication of economic and financial relations and the need for trading capital.
During this period, the first public offerings of shares were organized. Thus, in 1602, the concept of “joint joint stock enterprise” was introduced, and on the Amsterdam Stock Exchange, opened in the same year, it was possible to purchase shares of the Netherlands East India Joint Stock Company (“Vereinigte Oostindische Compaignie” or “VOC”). The capital of 6 million 424 thousand 588 guilders 3 was a gigantic sum for that time, comparable to the budget of the entire state. The Amsterdam Stock Exchange was intended for trading in shares of the East India Joint Stock Company, which were issued with a par value of 3 thousand guilders each and sold on the primary market to 1,143 persons. It is noteworthy that the holder did not receive shares, but a receipt for payment for the shares. The fact of the transaction was taken into account in the register of shareholders. Further circulation of the securities was carried out on the secondary market by entering new data in the register. Dividends on shares of the Dutch East India Company were paid not only in cash, but also in spices and herbs 4 . Note that in addition to shares, this issuer also issued bonds. Trading shares on the Amsterdam Stock Exchange stimulated the development of financial innovations related to these transactions: at the beginning of the 17th century, the first derivatives, such as futures and options, were recorded, the underlying assets of which were shares.
During 1609−1680, a number of financial innovations appeared: the so-called “short positions” or agreements to sell an asset in the future when the asset itself is not in the possession of the initiator in the present; transactions with leverage or using borrowed funds and repo transactions with repurchase 1.
In parallel with the development of the financial market, the banking system was improved, and the prerequisites were created for the emergence of central banks. Some historians believe that the treasury of the Templar Order in the 12th century already performed the functions of a centralized monetary authority 2.
The Order of the Templars is the prototype of a modern transnational corporation, however, attributing to this medieval organization the role of a central bank in the modern sense is incorrect: the Templars did not monitor the state of financial markets and the banking system and did not perform a monetary issuance function, but carried out only some individual functions of monetary authorities, for example, refinancing .
Amsterdam Exchange Bank ( Amsterdamsche Wisselbank), created in 1609, is considered to be the closest in functionality to a central bank.
By the beginning of the 17th century, there were a number of problems in the Netherlands, the solution of which was necessary for the further development of both the financial market and the world economy as a whole. The rapid development of international trade led to the deterioration of coins, a high load on the financial system with a large number of foreign and domestic means of payment and chaos in the system of money issue and circulation. The legislative centralization of coinage and the creation of a bill bank to account for bills became a turning point in the history of the financial market. Now trade participants could not only purchase officially backed bills, but also exchange them for coins without damaging the latter - damage to coins became meaningless, since strict requirements were established for the coins with which a bill could be purchased. It is noteworthy that the Amsterdam Bank concentrated on itself the issuing function (although some mints in the Netherlands were still functioning at that time) and the refinancing function. This bank also carried out currency exchange. With a wide variety of circulating foreign currencies and domestic money (florins, ducats of various origins, rijders), a fixed exchange rate for the bank's currency was first established. Later, the rate became market, and the price of the currency of the Amsterdam Exchange Bank was formed according to market principles.
The Amsterdam Exchange Bank cannot be called a full-fledged central bank, since despite the fact that it performed the issuing function, regulated monetary circulation, carried out foreign exchange policy and subsequently refinancing, this bank had two distinctive features that do not allow this bank to be placed among the central banks : it did not have the status of a state bank of the country and carried out settlement, deposit and exchange activities, purposefully receiving gigantic profits. Only over time, exchange fees (the so-called “agio”) were reduced.
Almost simultaneously with the development of financial relations in the Netherlands, similar changes took place in Sweden. Metal shortages, inflation and high government spending led to similar transformations. In 1656, the Stockholm Bank was created ( Stockholms Banco), which belonged to an enterprising private individual, Johan Palmstruch, but was controlled based on the guidelines of the Swedish king. In 1661, the Bank of Stockholm issued what is considered the first banknote 1. However, although the Amsterdam Bank also issued checks similar to banknotes, Swedish banknotes circulated freely as legal tender and were issued regularly on a large scale. A few years later, in 1664, the Stockholm Bank was unable to ensure the circulation of banknotes and was declared bankrupt. In 1668, the bank came under the control of the Swedish parliament and became part of the Riksens Stenders Bank ( Riksens Ständers Bank), which became the first central bank 2. The functionality of the first central bank, after the dramatic banknote events, was limited to refinancing and clearing operations to service trade.
The Bank of England became the next central bank. In 1694, it was established to manage the national debt, but also functioned as a bank of banks for refinancing, including providing loans to the British treasury. Notably, the Bank of England introduced several financial innovations (for example, overdraftable bank checks) 3 . The Bank of England issued banknotes taking into account the problem of converting banknotes into gold.
Starting from the 18th century, national central banks began to be created in Europe, and then in other parts of the world, which contributed to the development of the money market and the financial market in general. New exchanges and banks appeared, including those with share capital. The first “soap bubbles” began to appear in the financial market, such as the collapse of the British South Sea Company in 1711 ( South Sea Company), when the optimistic confidence of investors in the impeccable financial condition of the issuer caused a sharp increase in share prices, contrary to their real value, which subsequently led to the depreciation of the shares themselves.
At the same time, the Dōjima kome ichiba rice exchange was founded in Japan, which in the first half of the 18th century became the first exchange on which standardized futures contracts were traded, similar to modern futures. Agrarian Japan, where wages in certain sections of society were paid in rice, needed a financial institution that would perform the function of a centralized exchange of rice for means of payment. In 1697, a rice exchange was opened, which already in 1710−1730 became a kind of financial center 1. The circulation of a large number of futures contracts contributed to the development of theoretical concepts for describing market price movements: the so-called Japanese candlesticks are a shining example the first tools for analyzing the state of financial markets.
Early capitalism, known as mercantilism, had a significant impact on the development of the financial market: two new segments emerged - the stock market and the derivatives market; institutional banks emerged. The emergence of central banks and a two-tier banking system complicated the structure of the money market. The gradual industrialization of the economy created new preconditions for the development of the financial market. While the period of early capitalism of the 16th–18th centuries was characterized by the institutionalization of the financial market, the period of the 19th and first half of the 20th centuries is associated not only with the emergence of new institutions and instruments, but also with important transformations within the already established ones.
Period of developed capitalism(from the end of the 18th to the second half of the 20th century) is associated with very important transformations in the financial market: the emergence of new exchanges specializing in financial instruments, the emergence of financial ratings and indices, the emergence of various legislative acts regulating financial markets. To such a catalyst for the development of the financial market as the need for trading capital, was added the need for production capital: capital-intensive sectors of the economy (for example, construction, and especially railway construction) needed long-term financing.
In 1792, the New York Exchange was founded, initially trading on Wall Street under a tree. Later, in 1817, the exchange was officially named the New York Stock Exchange. Exchange quotes became available not only to interested parties, but also to the public: with the development of technology, prices for financial instruments began to be disseminated, first with the help of pigeons of Paul Reiter, the founder of the Reuters news agency, 1 and then with specialized newspapers with stock exchange data. Derivatives also began to be traded on exchanges: the creation of the Chicago Board of Trade (“CBOT”) in 1848 marked the beginning of the history of standardized exchange-traded derivative contracts such as forwards and futures.
The development of capital-intensive industries - construction, mechanical engineering, metallurgy and railways - stimulated the issuance of debt and equity instruments to raise funds. The first convertible financial instruments appeared, the first example of which was the issue of convertible bonds into shares in the United States by a railway company Racine and Mississippi Railroad Company in 1875. Their appearance indicates the establishment of connections between segments of the financial market and the financial instruments themselves.
In 1896, the first Dow Jones index of 12 stocks was launched in the United States. Subsequently, other indices were added to this index, reflecting the dynamics of financial instruments in various segments of the financial market. Investors needed not only information about the prices of financial assets, but also information about their quality, which is why rating agencies appeared at the end of the 19th and beginning of the 20th centuries. The first credit rating agency was Equifax ( Equifax), created in 1899 in the USA. At the beginning of the 20th century, analytical agencies were created Moody's And Standard & Poor's, which subsequently began to determine the financial condition of companies and countries using ratings. Note that infrastructural innovations, such as ratings and indices, have created the basis for new financial instruments. For example, at the end of the 20th century, derivative instruments related to the dynamics of certain indices began to appear, such as futures on stock indices 2. Ratings make it possible to differentiate securities and issuers based on various characteristics, including the financial condition of the issuer.
At the beginning of the 20th century, there was a revolution in the understanding of the central bank institution. The founding of the US Federal Reserve System in 1913 was an important event in the history of the financial market, since with its advent the model of the functioning of monetary authorities changed: the central bank began to play an important role in the economy as a government regulator that ensures stability. The Banking Act, known as the Glass-Steagall Act, developed and improved in 1933-1935, not only established the division of banks into two types (investment and depository lending), but also predetermined the creation of the Open Market Committee (“FOMC”) and the development a wide range of regulatory acts that have formed new elements in the mechanisms for regulating liquidity. This strengthened the role of the financial market, in particular the money market, in the conduct of monetary policy.
In 1927, the bank J.P. Morgan Chase The first depositary receipts for American investors on shares of foreign companies were introduced, which allowed stock capital to more easily overcome national borders 1 .
The capitalist formation has given the world a number of significant transformations, including those related to the evolution of the financial market, the emergence of convertible and new standardized derivatives, as well as the use of indices, which have moved the financial market to a new qualitative level.
On stage of post-industrial economic development(second half of the twentieth century) there is a globalization of markets, finance and capital. A new catalyst for the development of the financial market has emerged - the need for speculative capital. Speculation has always accompanied trading in certain financial instruments, but only in the second half of the 20th century the need for speculative capital (the creation of securitized securities and other instruments related to them, as well as derivative instruments without delivery of the underlying asset) is associated precisely with the transition of speculation into the category catalysts for the development of financial markets. The desire to expand and complicate the market, to involve more participants and thereby increase profits, while simultaneously increasing risks, has become a new driving force for the development of the financial market.
The recovery and economic recovery after World War II had a significant impact on the emergence of securitization. Banks were forced to create pools of lending assets to provide financing for subsequent loans. Securities securitization was first applied to a pool of mortgage loans in 1970 in the United States. The government's National Mortgage Association issued the first securitized securities 2 . The issue of securities based on securitized assets became a financial innovation, later applied in other sectors of the economy. Securitization allowed for a systemic effect: housing became more affordable, and the number of mortgage loans and securitized securities increased. The volume of mortgage-backed securities, according to the Securities Industry and Financial Markets Association (“SIFMA”), exceeded $9 trillion in 2008, while the volume of securities based on assets other than mortgages amounted to year $2.6 trillion US, which allows us to talk about important role securitization in the history of the financial market 3.
The 1970s saw significant changes in the derivatives market, with the first exchange opening in Chicago in 1973 CBOE, specializing in standardized options trading. On the exchange CBOE Various infrastructural innovations were applied: the “Black-Scholes” model for determining option prices and computerization of quotes 1 . Initially, trading was carried out using stock options, but then the list of underlying assets was supplemented with credit and other instruments.
The emergence of the derivative instrument "swap" was the next important event: in 1981, the first foreign exchange transaction of the "swap" type was concluded between a company IBM and the Bank for International Settlements. Six years later, in 1987, the nominal volume of trading in swaps amounted to US$865 billion, and in 2006 this figure reached a record and exceeded US$289 trillion, which indicates the high popularity of this instrument 2 .
The next important event was the standardization of the interbank market. The interbank market was formed with the emergence of the first banks, but only the emergence of a wide range of credit instruments, including “swaps”, which were associated with the dynamics of interest rates in the interbank market, required the standardization of interbank market indicators. This process was started in the UK by the British Banking Association together with the Bank of England. Between 1984 and 1986, a number of indicators were introduced, such as the swap rate indicator (“BBAIRS”) and the interbank lending rate “BBALIBOR”. According to the British Banking Association, today about 20% of all interbank loans in the world are associated with the London interbank market, and rates are calculated for 10 major world currencies, which allows these indicators to be considered global money market indicators 3 . The introduction of standardization and unified indicators contributed to the further development of financial innovations in the field of credit instruments.