Having No stock market?

[One]

It seems the Stock market causes a great deal of problems. Is it possible not to have a stock market. or at least not be so dependent on it?

[Riggo]

Sure. Why Not? Why not stand in line for hours at a time for a loaf of bread or have our children fight each other for the change tourists through at them out of pity? Seems cool.

[SDD]

Sure. Then when you want to sell your stock, you would have to locate the seller directly -- maybe on Craig's List? And the advantage of that would be . . . ?

[Richard E]

I've often questioned myself that. But i think stock markets do serve a purpose for teh common good.

When starting up a company, it is extremely hard to get your finances together. The bank won't offer you a loan because they've never heard of the product your making (ofcourse not, you've just started) and you don't have too much money yourself either. So you interest people for you idea. you sell them bits of your future company, to get things started. If you make a profit, the profit is partially theirs.
Now these bits of companies can be traded. you can also trade in currencies or state bonds, which are really bits of an economy, or commodities. Buying or selling options serves as an insurance. by selling an option, i guarntee that i will have a share at a particular price. If i buy an option, i accept a risk, and hope for a profit.

Now the stock market serves as a way to channel money to those sectors that are most profitable: those businesses that cater best to consumer demand. This exactly what is the cirsis: money does not flow, people can't keep their companies running, and nobody can pay of their debts.

However i agree with you that the stock markets have some bad side effects. Companies may simply borrow too much money, or take to big risks. Sometimes the stock exchange does not reflect the actual value of the company.
Market aslo have to tendency to be only about monetary value, and not social or ecological value. Things are only valued when the rest of the stock market can "see" it. A nice forest can't be sold on the stock exchange, but wood can. Guess what happens to the forests.

There are also other ways of collective ownership (and shareholdership is collective ownership, just amongst a very particualr group of people)
Companies can be owned by workers, or communities. same goes for natural resources. People that have an actual, real life stake in the company are less inclined to sell when the markets plummet. But then again, these people might be willing to put more money in the company than what its actually worth.

It's not easy. Stock markets are a cornerstone of today's economy, and crumbly as they may be, they are damn hard to replace.

[Philip N]

You can reduce dependency on stock market in many ways. One common strategy is to put your crucial money in safe investments such as t-bills and crazy money in stock market. That way you can get the advantage of a stock market's gains without worrying you will be ruined.

Even if there were no stock market, companies can still get themselves in similar troubles with debt, causing job losses, etc... You'd have to eliminate all sorts of loans if you want to secure against that happening, but you will also harm economic growth (in other words, many of those companies and jobs won't exist in the first place). No risk, no reward.