Sunday, 2 December 2007

Stealing The Silver

A Meeting Organised By Gresham College

Gresham College, London, UK
12th November 2007


MICHAEL MAINELLI, Mercers’ Professor of Commerce, Gresham College

I was first attracted to the talk by the concept which it advances – that investment represents an intergenerational wealth transfer, and, implicit in all wealth transfers, is a value judgement upon the equity of such transfers. This has become one of the great issues of our time, particularly if we subscribe to the view that one of the most pressing problems facing humanity is that of climate change - which represents an intergenerational wealth transfer from the future to the present, a great disinvestment, you might say.

There were two central themes to the evening – the question of the appropriate discount rate between generations and the issue of wealth transfers. The presentation looked at the latter before moving on to the former. On the issue of wealth transfers, there are two principal approaches – the bottom up approach, where wealth is transferred from the poor to the rich, mainly through the tax and benefits system. This approach underpins most of the social welfare systems in Europe. The second approach is the top-down approach, where the rich appropriate from the poor and seek their own advancement through this approach. We might stylise the bottom up approach as that used by Robin Hood, and the top down approach as that used by the Sheriff of Nottingham. The evening contented itself with a review of the approach of the Sheriff of Nottingham.

I really enjoyed the evening. It was both stimulating and provocative. Although the issues were complex and the subject matter potentially dull - it is difficult to get excited about discounted future cash flows – Professor Mainelli expounded his views in such an entertaining way that the audience was captivated. As an act of theatre it was extremely enjoyable. I would recommend the lecture series as both informative and enjoyable.

READ the full report.

1 comment:

Anonymous said...

It was a surprisingly good lecture! - I guess it's all in the speaker.
The link to the lecture (by the way, for others coming across this) is: