Securities Law and Public Policy
探讨在封闭资本市场中，投资者财富与实体经济资产的关系，分析三种解决资产流动性问题的制度安排（国有制、家族集中持有、金融市场），并论证证券法和公共政策应关注做市商健康以维护民主资本主义。
In a closed capital market, the aggregate wealth of investors equals the value of the economy's real assets (less their share of the government burden). Most of these assets-engine lathes, electric generating plants, diesel locomotives, real estate-are highly illiquid, no more liquid, probably, than used cars or secondhand watches, and for similar reasons: The seller knows far more than the buyer about whether the asset has been abused, undermaintained, etc. The average citizen is far from rich. One practical consequence is that his unexpected cash needs loom large in relation to his wealth. If he held his wealth in the form of direct claims on the economy's real assets, he would have to incur prohibitive liquidation costs to meet his cash needs. Thus he can't afford to own such assets directly. Broadly speaking, countries solve this problem in three ways. (1) The state owns the productive assets. The saver holds his wealth in the form of claims on the state. Claims on the state can, of course, be vastly more liquid than direct claims on the country's productive assets. (2) Ownership of real assets is concentrated in a few rich families. Their unexpected cash needs will be larger than those of the average family, but not much larger. Because their needs loom small in relation to their wealth, they can meet these needs while still devoting the bulk of their portfolios to real assets. (3) Financial institutions and markets make claims on real assets liquid enough that the average family can use them to meet their unexpected cash needs without excessive penalty. Two kinds of institution can transform claims on real assets into something the average citizen can afford to own. Banks can diversify across the cash needs of their claimants; their liquidation problem is confined to the difference between deposits and withdrawals. Corporations can diversify across a variety of real assets, thereby minimizing the potential advantage of information on a single asset to those who trade ownership claims on the corporation's portfolio. But widespread ownership of real assets requires something more than these admittedly important institutions. It requires securities markets. Corporate shares that are traded in dealer markets are vastly more liquid than shares that aren't. Dealers play a critical role in making ownership (albeit indirect) of the economy's real assets feasible for the average family. The first way to solve the ownership problem concentrates all economic power in the state; we call it communism. The second way concentrates all economic power in a small group of people who use that power to cultivate a mutually beneficial partnership with the state; we call it fascism. The third way is what we call democratic capitalism. But the third way requires active, liquid securities marketsand such markets require healthy dealers. If a dealer accumulates a large position by accommodating trades that are motivated by information entering consensus price before the dealer can lay the position off, such trades can damage the dealer, perhaps fatally. That's a valid reason for discouraging trading on so-called information, quite apart from whether such trading entails misappropriation of corporate property or wire fraud. Similarly, market manipulation (which, in dealer markets, is manipulation of dealer prices) may harm dealers by misleading them about the true location of equilibrium prices. That's a legitimate reason for discouraging market manipulation. Our securities laws, however, are vague not merely about the purpose of proscriptions against the use of inside information and market manipulation, but about what is being proscribed. Because dealers play a critical role in democratic capitalism, their health is a proper concern of public policy. We shouldn't be shy about recognizing that concern in our securities laws. Jack L. Treynor is President of Treynor Capital Management, Inc. in Palos Verdes Estates, California.