The rise and fall of the penny-share offer : A historical sociology of London’s smaller company markets
For the last two years I have been working on a ‘historical sociology’ of two stock markets established in London in 1995 in response to a series of rule changes at the London Stock Exchange (LSE).
The first, the Alternative Investment Market, or AIM, was set up by the LSE. It was established as part of LSE chief executive Michael Lawrence’s ‘seven-point plan’ for the repositioning of the Exchange as an engine for economic growth focused on the UK regions. AIM was also, in part, a reactive move allowing the Exchange to deal with competitive threats in Europe and at home, particularly growing activity under its own Rule 535. It has acted as a proving ground for many smaller companies and plays an important role in the political positioning of the LSE.
The second, OFEX (renamed PLUS in 2004) was privately operated and driven by commercial demand. Originally operated as a trading facility, it achieved legal recognition as a ‘designated market’ in 2001, and then as a Recognized Investment Exchange (RIE) in 2007. As OFEX it coexisted with the LSE and rode the dotcom wave; as PLUS it served as a vehicle for a market rebellion against the LSE. It struggled to maintain a commitment to its original small company constituency and to compete as a trading venue of choice against the Exchange. While AIM has flourished, PLUS faltered after the financial crisis of 2008, and my narrative finishes in 2012 with the sale of the PLUS RIE licence to ICAP, now NEX.
My research is based on interviews with members of the small company stock market community, as well as extensive documentary records. I have compiled a narrative account of these markets designed primarily for interested academics and for members of the professional community. It’s freely available and you can download it here. My narrative begins on the old floor of the LSE prior to the 1986 ‘Big Bang’ and finishes with the failure of PLUS in 2012. I conclude with some brief reflections upon the challenges and opportunities facing stock markets serving the smaller company sector, as illuminated by this history.
Please feel free to download, circulate, and quote.
Suggested citation: Roscoe , P. J. 2017, The rise and fall of the penny-share offer : A historical sociology of London’s smaller company markets. University of St Andrews. http://hdl.handle.net/10023/11688
A Richer Life was published by Penguin on 7 May 2015. It first appeared in February 2014, under the title I Spend Therefore I Am. It argued that the act of purchase, the handing over of cash in return for goods, had become the defining relationship of our society, and that we have come to accept its values – individualism, convenience, immediate gratification and value for money – as the only ones that count. It showed how economics, a supposedly dispassionate, universal science of human behaviour, makes the world it describes, and made a blunt critique of our abject surrender to that ‘science’. The paperback edition is revised and enlarged. Its title reflects an attempt to tackle the most important question of all those raised in the original book: what are we to do now?
Here’s what they said in the papers:
A brilliant critique (Robert Skidelsky, prize-winning biographer of John Maynard Keynes)
Impressive. Important, very thoughtful and thought-provoking (Ha-Joon Chang, author of ’23 Things They Don’t Tell You About Capitalism’)
A splendid denunciation of the dismal science [of economics]. . . A fine book, on the side of the angels (Guardian)
Very readable and entertaining. Roscoe bemoans the power of economics . . . using some intriguing examples to make his case (Independent)
Roscoe is right to remind us that the habit of seeing all our problems in economic terms has fatally narrowed the range of motives to which politicians appeal . . . that the relentless drive to attach a market price to everything is undermining the realm of human values. His most important conclusion is that we must confine the economists to the asylums – universities, for instance – where they can do no harm (Roger Scruton Prospect)
An engaging read, and a powerful description of the many ways we have lost our bearings as a society. A Richer Life makes the case that economics has left us impoverished as human beings (Sunday Times)
Roscoe makes a convincing case for the way economics has commodified and devalued aspects of our lives . . . exposing the flawed assumptions in the economic theories of some respected thinkers. He gives us a fresh and incisive critique of a doctrine still shaping our society (Observer)
Wide-ranging and readable. Roscoe makes many interesting points about how we judge governments by market standards . . . via an insightful account of some of the problems of mainstream economics. A very engaging, erudite and illuminating account (Times Higher Education)
It is true that we sometimes take economists too seriously, and that westerners may have lost something in their rush to replace community values with the individualistic ritual of market exchange. But Roscoe’s more powerful argument is that we now approach sex and love in the way we might shop for a low-cost holiday on a price comparison website (Financial Times)
A Richer Life’s vision of a future world where we are each governed by economics is quite alarming. Despite the gloom, Roscoe concludes that economic-thinking shouldn’t be dumped. It just needs to leave behind the dispassionate science. (Scotsman)
An intelligent and tightly argued book . . . warranting close attention. There are some great examples in the book of how economic reasoning hides the true cost of things and narrows our decision making into simple profit-maximising (MakeWealthHistory.org)
A radical, inspiring, agenda-setting critique that shows how neo-liberal economics has invaded every area of society, including our most intimate decisions. Truly revelatory (Sublime Magazine)
Roscoe makes a powerful case that we need to change course (Christian Aid)
Written with humour, wisdom and compassion, and investigating the worlds of work, shopping, healthcare, house-buying, online dating, politics and daily life, this brilliant and timely book exposes the true cost of economic thinking, points the way to some compelling alternatives – co-operatives, local currencies, non-Western finance, community – and draws attention to some other, timeless values that few of us have yet forgotten (Politicos)
A lively, radical book that challenges dry, dismal principles and champions the greater values of charity and civic virtue (The Times)
A fascinating book on so many levels. Timely and important (Scotsman)
Loads of economists are lining up to slag this book off, which alone makes it an economically sound buy (Sunday Sport)
And here’s what it says on the jacket:
‘Is a promotion at work worth more than time with family? Does the price of cheap socks compensate for their being made by children? Might a new lover be better than the one you have? How do we choose when what we want is bad for someone else? In fact, in a world as complicated as ours, how do we choose at all?
Over the course of the 20th century economics has become our most trusted science of decision-making. From government policies to personal decisions – such as buying a house, educating our children, caring for our sick or even meeting a spouse – economic principles govern both our range of choices and how we choose between them. But economics is not a perfect science. It is political and far from impartial, and yet its values – ownership, efficiency, cost benefit and self-interest – now threaten to usurp all others. At a time when the most urgent problems require collective action, economics is perhaps our greatest obstacle to change.
Written with humour, wisdom and compassion, and investigating the worlds of work, shopping, healthcare, house-buying, online dating, politics and daily life, this brilliant and timely book exposes the true cost of economic thinking, points the way to some compelling alternatives – co-operatives, local currencies, non-Western finance, community – and draws attention to some other, timeless values that few of us have yet forgotten.’
You can find it in your local independent bookseller. Here’s mine. And here’s the gorgeous, understated, hardback cover: