Planet Money Summer School 3: The first stock and perpetual life
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Jul 26, 2024 
Anne Carlos, an economic historian from the University of Colorado, dives into the fascinating origins of modern finance. She explores how the stock market began in 1600s Amsterdam, the role of the Dutch East India Company, and innovative practices like short selling. The conversation touches on the significance of perpetual bonds and how they shape contemporary finance. Carlos also highlights the delicate balance between market growth and instability, illuminating the historical lessons that still impact investors today.
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Isaac Le Maire's Short Selling
- Isaac Le Maire, a major shareholder in the Dutch East India Company, was ousted and banned from trade.
- He retaliated by short selling the company's stock and spreading rumors, but ultimately failed.
Scalability of the Dutch Model
- The Dutch stock market model proved scalable, expanding from one company to thousands.
- This scalability allows firms to access capital, fostering economic growth and wealth creation.
Limited Liability and Risk
- Limited liability corporations (LLCs) limit investor risk to their investment.
- This protection encourages investment and economic growth by mitigating potential personal losses.