I need help creating a thesis and an outline on Discuss the range of possible outcomes if Shakespeare’s advice of neither a lender nor a borrower be should become a general law. Prepare this assignment according to the guidelines found in the APA Style Guide. An abstract is required. Neither a Lender nor a Borrower Be If Shakespeare’s ment, “neither a lender nor a borrower be…” became a general law, the implication would be that there would be no willing lenders nor borrowers. In essence, everyone and every region and individual would rely on its own resources to develop economically. Loans have incessantly enhanced role in corporate activities. Bank loans are the major source of financing small and medium enterprises in most countries. Even though there are other possible sources of loans, banks have been preferred in the recent past given their well organized and institutionalized mechanisms of loan lending and borrowing. Besides, it provides easy and cheap liquidity than other available lenders and intermediaries (Delaume 2012).
In the event that Shakespeare’s statement was a general law, there would not be the expanded financial liberalization and enhanced volumes of private capital flaws in the developed countries that was characteristic of 1990s. The post crisis capital mobility in the developing world (especially in Asia) was as a result of four forms of capital inflows. portfolio investments, direct investment, bank loans and other investments. Bank loans in countries like Malaysia saw their economies grow from third world economies to second world status (Shin-Ichi, 2013). Loans that were advanced to the states through World Bank and IMF helped improve the overall economy of the nations and the welfare of their citizens. This would not be possible had Shakespeare’s statement been a general law.
In domestic financial markets, banks are the most outstanding means of channeling savings to investments with the most favorable returns. In the event that the statement by Shakespeare became a common law, banks would not provide liquidity and permit efficient pooling of risks (Shin-Ichi, 2013). The fact that there are lenders and borrowers creates an environment that enables the activities of banks to alter the composition of capital in a manner that is potentially good for enhancing capital accumulation. Development of banks as lending institutions institutionalizes them as the gatherers of information about firms and reducing corporate myopia by conquering the quandaries associated with informational asymmetry (Shin-Ichi, 2013). The powers are given to the banks by depositors. These powers have led to availability of valuable information that helps a firm engage economically with another. Had lending and borrowing been absent, such powers would not be within the reach of banks.
Economic development and entrepreneurship over the past many decades have provided proof that every great step begins with ideas. People have made great impact on themselves and populaces around them with simple ideas that they were to make possible through the help of others. Ideas have led to innovations by people who had no resources because they have been able to acquire loans. Without the ability to get a loan to make one’s idea practical, there would be a situation of impeded innovation (Delaume 2012). The technological advancement that has become characteristic of the 21st century would be missing. Many people who have their ideas change the world have been benefactors of loans.
Lending and borrowing has made the world a better place. Had humanity set its thoughts and convictions on Shakespeare’s ideas, the world would be more imbalanced than it is today. Lending and borrowing has led to even redistribution of world resources. The world has experiences the technological and other innovations given the ability to loan. “Neither a lender nor a borrower be…” would be a principle to make the rich richer and dip the poor deeper into poverty.
Delaume, Georges R. Legal Aspects of International Lending and Economic Development
Financing. Dobbs Ferry, N.Y: published for the Parker School of Foreign and Comparative Law, Columbia University in the City of New York [by] Oceana Publications, 2012. Print.
Shin-Ichi, Fukuda. The Impact of Bank Loans on Economic Development: An Implication for
East Asia from an Equilibrium Cntract Theory. New York, 21 Feb 2013.