Home
Articles
Democratization of Capital

“You cannot escape the responsibility of tomorrow by escaping today.”
Abraham Lincoln

In today’s world only those societies that can allocate their resources to highest value added areas will have growing economies. This can only be achieved by making sure that the financial markets are free and competitive. Attaining real competitiveness in financial markets, in its turn, will depend on depoliticizing these markets and on preventing concentration.

The concentration of economic and political power in the hands of a limited number of persons and institutions result in the flow of resources to these persons and institutions as well as their close circles. Consequently, inadequate investments are made in the development of innovative and creative thinking that is key for social progress and development.

“The democratization of capital” means the allocation of resources to the highest value added areas and not an equal distribution of resources regardless of value creation potential. Therefore, as a society, we have to question how we allocate our limited resources. Should these allocation decisions be made to preserve political power and already accumulated capital or should we seek new ideas and projects to that will improve nations overall wealth creation potential. Milken Institute’s “Capital Accessibility Index” developed to assess the chances of new ideas and projects to get financing can be a useful guide. This index is computed by an evaluation of the general economic picture, the banking sector, financial markets, the attitude of international capital, and the assessments of rating agencies on a per country basis.

Milken Institute
Capital Accessibility Index (2000)

1. USA 5.4
5. UK 5.3
12. Almanya 4.8
24. Güney Kore 4.5
50. Yunanistan 4.0
60. Brezilya 3.7
66. TÜRKİYE 3.6
80. Rusya 2.7

There is significant room for improvement for the democratizaton of capital in our country. The details of the study enumerate the factors that pull Turkey’s ranking down: High inflation, the shallowness of the banking sector, the weight of the state (politics) in financial markets, the inadequate corporate governance, the low level of foreign direct investment, and our credit rating.

Our task then is well defined. We must not deviate from the stabilization program and implement banking reform. On the other hand we must enhance corporate governance and explain the potential of our country to international financial markets. The most important task, however, is for those who control capital in our country to accept the need for diverting resources away from those who are close to power holders or those who have already established collateral, towards creativity and those who develop new projects.

For improving our democracy and economy we have to democratize our capital markets.

Dr. Argüden
yarguden@arge.com


Ethical Leadership for the Future
People focus more on corporate actions after the ethics scandals at the end of 20th and...
From Global Crisis to Global Governance
The mortgage crises that started in the US in 2008 soon turned into a global crisis....
Responsible Boards – Action Plan for a Sustainable Future
A sustainable global economy is one that combines long-term profitability with ethical behavior, social justice, and...
Right Reward for Right Performance
Aligning Executive Compensation with Good Governance Dr. Yılmaz Argüden1 “Price is what you pay. Value is...
Is More Regulation the Right Recipe for Better Governance
Increasing regulation of corporate governance is becoming a new trend in many jurisdictions. Yet good governance...
Rio+20 was a Bust
World leaders from government, the business world, NGOs and academia gathered at the UN’s Rio+20 summit....
Why Boards Need More Women
Diversity on boards is critical to sustaining performance. Broadening the composition of the board increases the...
Global Boards Help Make Companies Global
For organizations to endure, they must strike a balance between risks and rewards, short-term objectives and...
Attitude is everything: The case for Turkiye
Recent local elections have been a wake up call for numerous European leaders such as Angela...
Diversity at the Head Table
PDF olarak indirmek için tıklayın.
Measuring the effectiveness of corporate governance
Trust is the foundation of sustainable development. As the world continues to get smaller, our mutual...
ARGE Corporate Governance Model©
PDF olarak indirmek için tıklayın.
Consensual Delegation of Sovereignty
Thanks to changes in IMF voting, countries such as China, Mexico, and Türkiye now have a...
The Power of Inclusion
Editor’s note: When US President Barack Obama landed in Ankara on Monday, April 6, 2009, it...
From Global Crises to Global Governance
In a perspective from Turkiye, top business strategist and civic leader Yilmaz Argüden explores how global...
Opportunity from Crisis: Obama’s Chance for Real Global Leadership
In a perspective from Turkiye, top business strategist and civic leader Yilmaz Argüden argues that Barack...
Europe’s Dilemma: Values vs Interests and Protectionism vs Leadership
For decades European development has been guided by a number of key values: human rights, democracy,...
Digital Transformation and the Board’s Role
Digital players are threatening the traditional sectors and their business models and most of the executives...
Board And Innovation
Innovation is one of the most important issues in global business environment, nowadays. Innovation involves creation...
Legislating History
Recently various Parliaments throughout the world started to get in the business of legislating history!! Generally...
US – Turkish Cooperation Based on Shared Values
Since 9/11, the US unilateralism has been widely interpreted as a projection of hard power to...
Shaping The Future
The choices we make today shape not only the current results, but also the future. However,...
Water and Global Governance
The 5th World Water Forum has convened in Istanbul. Water is life. Everywhere and every day we need it. Water...
The Missing Political Debate
The US presidential elections have profound implications not just for the US, but also for the...
Lead Indicators
Managers usually make their decisions based on metrics, which can easily be measured and has an...
Family Businesses
Happy families are all alike, but each unhappy family has reasons of its own. Leo Tolstoy...
European Union and Turkiye in 2020
“The future belongs to those who believe in the beauty of their dreams.” Eleanor Roosevelt Let...
Civil Society in Support of University
“Only the educated are free” Epictetus That the importance of education increases further everyday is beyond...
Democratization of Capital
“You cannot escape the responsibility of tomorrow by escaping today.” Abraham Lincoln In today’s world only...
Second Career
“Life consists not in holding good cards but in playing those you hold well.” Joel Billings...
Center of Attraction
“It is not in the stars to hold our destiny, but in ourselves.” William Shakespeare To...
Going Beyond the Borders
“The shell must break before the bird can fly.” Lord Alfred Tennyson The greatest obstacle to...
Galatasaray and Education of a Nation
“Winning is not everything, but the will to win is everthing.” Vince Lombardi Education of a...
Corporate Governance
“The best way to create trust in an organization is to open all doors – from...
Those Who Fail to Share, Will Be Shared Out
“Dünyada görmek istediğin değişimi, önce kendinde gerçekleştirmelisin.” Mahatma Gandhi Unprecedent improvements in information and communication technologies,...
Representative Democracy to Participatory Democracy
“A journey of a thousand miles begins with a single step.” Confucius Decisions that are not...
Reform in Patent Legislation
“Change starts when someone sees the next step.” William Drayton Developed countries are adamant about extending...
Leaders Magazine Interview
LEADERS Magazine Interview Questions for: Dr. Yılmaz Argüden Chairman ARGE Consulting, Istanbul Senior Advisor and Representative...
Managing Diversity
Ladies and Gentlemen, It is a great pleasure and honor for me to address you to...
World Leadership by Example: Challenge for EU
The potential of EU for the leadership of the world was the subject of the largest...
Education for Sustainable Global Governance
Vision: The world will be a more stable and innovative place to live for the human...
Global Fault Line
Humanity’s search for truth and curiosity to reach further locations have been an ever lasting ambition....
Turkish-American relations and TAİK
Turkish-U.S. Business Council (TAİK) Chairman Dr. Yılmaz Argüden answered our questions concerning Turkish-American relations and the...
Global NATO
The most important role of government is to provide security and maintain stability. Significant changes occurred...