Avner Offer, Time Horizons and Market Boundaries
The Ellen McArthur Lectures, funded through the generosity of one of the earliest economic historians in Cambridge, have been given every 2-3 years since 1968. The first lecturer was Alexander Gerschenkron and the most recent (2016) was Jane Humphries. The four 2018 lectures will be delivered by Professor Avner Offer (Oxford), on 31st October, 1st, 7th and 8th November, at 5.00pm, in the Law Faculty (LG19), University of Cambridge, UK. All welcome. Enquiries to Amy Erickson: <ale25@cam.ac.uk>
‘Time Horizons as Boundaries for Market, Public and Social Enterprises’
Avner Offer
Why is the public sector so large in market societies? The future will be present one day and needs to be cared for. Who will do it and how? The forces are financial. Prevailing interest rates define a credit time horizon. A project that needs more time to mature cannot be undertaken by business alone and needs a social intervention. Uncertainty also screens off the future, and needs to be offset by government. The private-public boundary was determined by financial fundamentals. Economic history also provides a template for the future. Lecture one lays out the argument and a case study: Private-public partnerships were designed to overcome credit time boundaires, but did so at a cost in corruption inefficiency. The presumption in theory of market superiority has been falsified by experience. It is governments (and philanthropy) which provide the most patient capital. The historical investment in home ownership and in physical infrastructure (lecture two) has relied on social and political guarantees for long-term finance. But these social subsidies for finance have now driven home ownership beyond the reach of younger generations. Why are children not produced for profit? Raising them to maturity also exceeds the patience of capitalists. Lecture three shows how credit time boundaries have undermined markets for education and pensions. Credit time horizons are also ethical boundaries. Lecture four shows how transgressions give rise to corruption, how graft was overcome in the past and how it was allowed to return. Overall, credit time horizons determine the extent to which business or government will take charge of the future.
The Ellen McArthur Lectures 2018 Poster
Ellen McArthur Fund at the Faculty of History