Constitutional theory of investment

Author: Tang Shouning
Publisher:
Publish Date: 2005-09-01
Features: The constitutional theory of investment belongs to a pure theoretical research in economics. This research aims to propose a theoretical framework. Within this framework, the core focus shifts from the scarcity and efficiency standards traditionally emphasized by conventional theories to the consensus standard. When the investment formation of the entire society is regarded as a collective decision, the concept of consensus gains a foothold in economic activities. The risk in investment activities is essentially a constraint that requires investment decisions to adhere to the consensus rule. If an investment decision secures the agreement of all investors, there is no basis for the existence of risk. This raises the question of how to reflect and aggregate investors' opinions in investment decisions. By viewing financial products as tools for investors to express their rights and convey their opinions on investment decisions, and financial institutions as organizational forms established by investors to fulfill their rights, the discussion on how to implement the consensus rule in investment decisions can be explored. This provides a distinct explanation for investment activities, reflecting an exploration of expanding upon existing theories. The term "constitutional theory of investment" is used because it draws inspiration from Buchanan's constitutional economics, with the discussion centered around the fundamental concept of consensus.