Parasitic capitalists - a point to ponder.

[Audley Strange]

That's symbiotic... feed me well, keep me healthy, and I'll work well and willingly and make you money.

Of course, nowadays, damn few shareholders have done any serious capital investment in whatever company they have shares... the money goes on the market, not into company coffers, making them pure parasites who get fat and are prone to killing their hosts.

I agree, however I'd suggest that the problem with shares (from what I can glean from the financial arcana that the Good Lady Strange spouts) is that shareholders are not liable. I remember her suggestion that it be a legal requirement to, in the case of a company going into receivership and leaving lots of debt, make the shareholders liable for those debts.

I think that would go down as well as sherbert in your cocaine.

[JimC]

That's symbiotic... feed me well, keep me healthy, and I'll work well and willingly and make you money.

Of course, nowadays, damn few shareholders have done any serious capital investment in whatever company they have shares... the money goes on the market, not into company coffers, making them pure parasites who get fat and are prone to killing their hosts.

I agree, however I'd suggest that the problem with shares (from what I can glean from the financial arcana that the Good Lady Strange spouts) is that shareholders are not liable. I remember her suggestion that it be a legal requirement to, in the case of a company going into receivership and leaving lots of debt, make the shareholders liable for those debts.

I think that would go down as well as sherbert in your cocaine.

Shareholders should also be a fucking sight more vigilant about corporate governance, and directors voting themselves massive pay increases even if the company is shedding jobs and income left right and centre...

[Svartalf]

That goes against the very principle of limited responsibility that is kind of basic to the modern corporation. Whether that principle can be done away with without destroying the economy is far beyond my knowledge of economics.

My main problem with shares is that they have become a tradeable commodity in and of themselves, rather than being mere markers for how much money you have put into the company. A basic fix to that might (I'm not sure how practical that is) to calculate share value strictly from actual company assets and profit projections, and to make it mandatory to sell shares through the company itself, so that it would be the entity that buys and sells its own shares, making sure that all holders are actually invested with the company, and that they would buy back their shares at actual value, rather than feeding various intermediaries and letting prices rise ludicrously solely on a demand basis.

[John_fi_Skye]

Insufficiently regulated capitalism (as is too often the case) is often parasitic, and corrupts the political process by the influence of power and money to maintain privilege.

However, free-enterprise is also an engine of innovation and efficiency - societies who abandon it have crippled their abilities in this area, and invited the dead hand of authoritarian rule.

We need checks and balances; a society that tries to optimise the advantages of free enterprise, while putting a serious effort into restraining capitalist greed.

I will not pretend this is easy...

There can be no regulation of capitalism. One thing that history has definitely proven is that you go a long way before you find a politician - or an official, for that matter - who cannot be bought.

[JimC]

Insufficiently regulated capitalism (as is too often the case) is often parasitic, and corrupts the political process by the influence of power and money to maintain privilege.

However, free-enterprise is also an engine of innovation and efficiency - societies who abandon it have crippled their abilities in this area, and invited the dead hand of authoritarian rule.

We need checks and balances; a society that tries to optimise the advantages of free enterprise, while putting a serious effort into restraining capitalist greed.

I will not pretend this is easy...

There can be no regulation of capitalism. One thing that history has definitely proven is that you go a long way before you find a politician - or an official, for that matter - who cannot be bought.

There may well not be complete regulation of capitalism, but (especially given an active union movement and an active press) there can be sufficient regulation to allow a workable system...

The alternative of people's commissars does not fill me with great enthusiasm...

[Audley Strange]

That's symbiotic... feed me well, keep me healthy, and I'll work well and willingly and make you money.

Of course, nowadays, damn few shareholders have done any serious capital investment in whatever company they have shares... the money goes on the market, not into company coffers, making them pure parasites who get fat and are prone to killing their hosts.

I agree, however I'd suggest that the problem with shares (from what I can glean from the financial arcana that the Good Lady Strange spouts) is that shareholders are not liable. I remember her suggestion that it be a legal requirement to, in the case of a company going into receivership and leaving lots of debt, make the shareholders liable for those debts.

I think that would go down as well as sherbert in your cocaine.

Shareholders should also be a fucking sight more vigilant about corporate governance, and directors voting themselves massive pay increases even if the company is shedding jobs and income left right and centre...

I agree.

When I first left school I worked in insurance for several years. There were at the time insurance companies called "Names". These were basically syndicates that who'd invest in Lloyds and were able to open a small personalised franchise operation catering to specific groups. Sports car insurers, people who specialised in decent rates in high risk areas, that sort of thing. They got a cut of the profits and it was a happy time all round. Most of them considered it free money, but they didn't read their contracts suddenly these people found themselves liable for a percentage of the debts incurred because of the massive amounts of payouts.

They went nuts. They took it to court and a lot of them ended up bankrupt when the courts found them liable. We shouldn't gloat at this, but the principle is a sound one. An investment should be a contractual liablity of profit and loss. If the risk is more than initial investment then people are likey to be more cautious about irresponsible "get rich quick" schemes, but whether or not this would lead to responsible corporations or economic stagnation I don't know.

[John_fi_Skye]

Insufficiently regulated capitalism (as is too often the case) is often parasitic, and corrupts the political process by the influence of power and money to maintain privilege.

However, free-enterprise is also an engine of innovation and efficiency - societies who abandon it have crippled their abilities in this area, and invited the dead hand of authoritarian rule.

We need checks and balances; a society that tries to optimise the advantages of free enterprise, while putting a serious effort into restraining capitalist greed.

I will not pretend this is easy...

There can be no regulation of capitalism. One thing that history has definitely proven is that you go a long way before you find a politician - or an official, for that matter - who cannot be bought.

There may well not be complete regulation of capitalism, but (especially given an active union movement and an active press) there can be sufficient regulation to allow a workable system...

The alternative of people's commissars does not fill me with great enthusiasm...

Nor me. That's not what I'm about. Please consider my earlier posts before implying I'm arguing for the types of communist societies we've seen. They had nothing at all to do with altruism.

[Thinking Aloud]

That goes against the very principle of limited responsibility that is kind of basic to the modern corporation. Whether that principle can be done away with without destroying the economy is far beyond my knowledge of economics.

My main problem with shares is that they have become a tradeable commodity in and of themselves, rather than being mere markers for how much money you have put into the company. A basic fix to that might (I'm not sure how practical that is) to calculate share value strictly from actual company assets and profit projections, and to make it mandatory to sell shares through the company itself, so that it would be the entity that buys and sells its own shares, making sure that all holders are actually invested with the company, and that they would buy back their shares at actual value, rather than feeding various intermediaries and letting prices rise ludicrously solely on a demand basis.

That's what a private limited company is (although there are limits on being able to buy back your own shares). A public limited company is what the big ones are - where shares themselves are traded. (UK terms here.)

[Gawdzilla Sama]

Who's missing from this thread?

[JimC]

Nor me. That's not what I'm about. Please consider my earlier posts before implying I'm arguing for the types of communist societies we've seen. They had nothing at all to do with altruism.

Wasn't meaning to imply you in particular would argue for them, but many who see no value in capitalism make that particular jump...

I see capitalism as something with both great flaws, and certain benefits, and tend to argue we need clever and effective political processes to minimise the harm without hampering the benefits; others seem to say it is fatally flawed, cannot be mended, and a totally new approach is needed.

[Gawdzilla Sama]

Nor me. That's not what I'm about. Please consider my earlier posts before implying I'm arguing for the types of communist societies we've seen. They had nothing at all to do with altruism.

Wasn't meaning to imply you in particular would argue for them, but many who see no value in capitalism make that particular jump...

I see capitalism as something with both great flaws, and certain benefits, and tend to argue we need clever and effective political processes to minimise the harm without hampering the benefits; others seem to say it is fatally flawed, cannot be mended, and a totally new approach is needed.

What we need is a rational consumerism.

[John_fi_Skye]

Nor me. That's not what I'm about. Please consider my earlier posts before implying I'm arguing for the types of communist societies we've seen. They had nothing at all to do with altruism.

Wasn't meaning to imply you in particular would argue for them, but many who see no value in capitalism make that particular jump...

I see capitalism as something with both great flaws, and certain benefits, and tend to argue we need clever and effective political processes to minimise the harm without hampering the benefits; others seem to say it is fatally flawed, cannot be mended, and a totally new approach is needed.

"O, let me not be mad!"

Of the two types suggested in your second, antithetical sentence, I'm of the latter.

[Atheist-Lite]

Who's missing from this thread?

Someone with a answer? I can't help either. The human species stands on the very brink of one the greatest preventable tragedies in its entire history. So few see it coming, so few seek answers but everyone wants someone else to blame.

[Blind groper]

And what tragedy might that be, Crumple?

The thing about capitalism is that it works. Maybe not well, but it works. People will strive with great effort to enrich themselves and their families, where they will not work hard unless coerced under any other system.

So what do you propose as an alternative? Royalty? Communism? Totalitarianism? Anarchy?

The best system so far is a managed capitalism. People working hard motivated by greed, and with the worst excesses controlled by government. The problem with this system is not the capitalism. It is the government, which is often corrupt, and over-influenced by lobby groups promoting the welfare of the wealthy. So what needs changing is not the capitalism, but the government.

[JimC]

And what tragedy might that be, Crumple?

The thing about capitalism is that it works. Maybe not well, but it works. People will strive with great effort to enrich themselves and their families, where they will not work hard unless coerced under any other system.

So what do you propose as an alternative? Royalty? Communism? Totalitarianism? Anarchy?

The best system so far is a managed capitalism. People working hard motivated by greed, and with the worst excesses controlled by government. The problem with this system is not the capitalism. It is the government, which is often corrupt, and over-influenced by lobby groups promoting the welfare of the wealthy. So what needs changing is not the capitalism, but the government.

I broadly agree. But not just government, a healthy system needs a variety of checks and balances. Unions, consumer groups, a strong press and activist shareholders are all part of the mix. In many parts of the world, the balance is way off, but a cry that it's all wrong and should be torn down is a recipe for power-hungry opportunists to trump the idealists of the revolution, and the way is paved for totalitarian rule...