In today's world, you either own property or you are property.
It's an interesting situation that helps the very rich get richer, and the poor stay poor and the middle class pay the taxes.
Communists think that this means capitalism is wrong. Socialists do too, but try to act a little more moderate about it. However, their preferred solution is effectively to destroy it by using the government as some form of benign wealth distribution, and where possible, buying back infrastructure assets. It doesn't work. Indeed, by giving too much power to the State, we effectively become property of the State. It's scary socialists cannot see this, or weight the implications of this appropriately. But that is a different post.
At the other end of the scale are those like the Libertarians, whose core philosophy revolves solely around property and the much vaunted Free Market. The obvious danger in Libertarian philosophy is that it ultimately reduces a person's worth to purely economic terms, and some things cannot be measured in this way. That can be countered, to some degree, by enshrining in law some protection of a person's intangible rights, rights vested in the concept of property and ownership.
In a free market, the traditional benefits of capitalism are all fine and good. Supply and demand regulate price and provide incentive, profit rewards effort and risk, capital funds growth and supports innovation. But is the market actually free?
Ignoring the left wing market interventions for a moment (transnational corporations largely do), we see a market with one primary form of regulation: that of property rights. Except that the full ownership of property has been handed over, without thought, without real understanding, to shareholders. Shareholders were once suppliers of capital, but today, shareholders are merely speculators and wealth extractors.
When you consider the purpose of Corporations and most businesses, they have legal mandate to pursue only one thing: maximizing returns to shareholders.
In a system grounded in the principle of unconscious regulation, corporations will consciously serve one group alone. In a system supposedly geared for rewarding hard work, shareholders are rewarded regardless of their productivity. Shareholder primacy is a form of privilege and entitlement that could be likened to the aristocracy of the past.
I am in favour of capitalism. I see the value of having liquidity of investment, via the stock market. However, the current system isn't really serving the interests of the people at large. The mantra "greed is good" is recognised by the left as instinctively wrong. It is recognised by Christians as leading to sin. Greed is not good.
As usual, it's often not about the problem, it's about the solution. My solutions (when I finally figure them out) is not to rely on the State for salvation. And it's not to support the continuing status quo where ownership is structured as an entitlement and a small class of people can extract wealth to the point of ruining the lives of communities and workers that have participated in the success of the corporation. I have the glimmerings of a solution. It involves keeping the system, but changing the rules. I'll explore this in future posts, especially if this post provokes a reaction that helps my thinking.
So for now, I'll say just one thing:
In today's world, you either own property or you are property.
--ZenTiger
It's an interesting situation that helps the very rich get richer, and the poor stay poor and the middle class pay the taxes.
Communists think that this means capitalism is wrong. Socialists do too, but try to act a little more moderate about it. However, their preferred solution is effectively to destroy it by using the government as some form of benign wealth distribution, and where possible, buying back infrastructure assets. It doesn't work. Indeed, by giving too much power to the State, we effectively become property of the State. It's scary socialists cannot see this, or weight the implications of this appropriately. But that is a different post.
At the other end of the scale are those like the Libertarians, whose core philosophy revolves solely around property and the much vaunted Free Market. The obvious danger in Libertarian philosophy is that it ultimately reduces a person's worth to purely economic terms, and some things cannot be measured in this way. That can be countered, to some degree, by enshrining in law some protection of a person's intangible rights, rights vested in the concept of property and ownership.
In a free market, the traditional benefits of capitalism are all fine and good. Supply and demand regulate price and provide incentive, profit rewards effort and risk, capital funds growth and supports innovation. But is the market actually free?
Ignoring the left wing market interventions for a moment (transnational corporations largely do), we see a market with one primary form of regulation: that of property rights. Except that the full ownership of property has been handed over, without thought, without real understanding, to shareholders. Shareholders were once suppliers of capital, but today, shareholders are merely speculators and wealth extractors.
When you consider the purpose of Corporations and most businesses, they have legal mandate to pursue only one thing: maximizing returns to shareholders.
In a system grounded in the principle of unconscious regulation, corporations will consciously serve one group alone. In a system supposedly geared for rewarding hard work, shareholders are rewarded regardless of their productivity. Shareholder primacy is a form of privilege and entitlement that could be likened to the aristocracy of the past.
I am in favour of capitalism. I see the value of having liquidity of investment, via the stock market. However, the current system isn't really serving the interests of the people at large. The mantra "greed is good" is recognised by the left as instinctively wrong. It is recognised by Christians as leading to sin. Greed is not good.
As usual, it's often not about the problem, it's about the solution. My solutions (when I finally figure them out) is not to rely on the State for salvation. And it's not to support the continuing status quo where ownership is structured as an entitlement and a small class of people can extract wealth to the point of ruining the lives of communities and workers that have participated in the success of the corporation. I have the glimmerings of a solution. It involves keeping the system, but changing the rules. I'll explore this in future posts, especially if this post provokes a reaction that helps my thinking.
So for now, I'll say just one thing:
In today's world, you either own property or you are property.
--ZenTiger
You are starting to sound a bit like a Liberal Democrat, and there are worse things in this world...
ReplyDeleteWhile property rights are important, we have an unfortunate mindset now among libertarians/many conservatives. Tagging someone's fence (which can be painted over - and with graffiti guard, washed off), is seen as a bigger crime than dealing P and ruining countless lives. So something has to change.
We also have the 'tax is theft' meme from the same people. Those who do not have kids objecting to paying tax to fund education for those who do, for example. The fact that they will grow old and require educated doctors and so forth does not seem to register. We need to commit to a good education for *everyone*, even if you do not have children. We need to think about the needs of others -- not *instead* of our own needs, as martyrs do, but in *addition* to our needs.
It's the walking over the long slow miles in another's shoes that really matters.
Well, as far as Liberal Democracy goes, I am in favour of constitutional constraints on government power protecting individual and family rights.
ReplyDeleteHowever, in this post I am thinking more about how economic power plays out, and in particular, I aim to discuss (in later posts of no fixed date) the weaknesses in how shareholders end up defacto full owners. Do Liberal Democrats worry about those things in the same way too?
I agree with your point about the fuss made of relatively minor problems compared to the seemingly lack of effort results?) over the major ones.
being a shareholder is not really aristocracy as you don't have to born into it, money comes and goes and leaves no suit of rusty armour behind.
ReplyDeleteJust look at the recent sharemarket crash, call a spade a spade, those same shareholders, many common people, have lost alot of money in the last six months.
They, we, are not aristocrats. However, considering NZers spend 12-15% more than they earn it's no suprise that someone with cash to invest is seen as an "aristocrat"!!
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Note that Labour seems to be pulling back on all its rich environmental commitments. Commitments underwritten and paid for by the wealth of the nation's citizens.
The tacit strategy of Labour seems to have been to milk during the good times, hoovering up the cash. When a financial crisis hits who can a socialist government milk for money?
What have they managed to acheive with all that excess cash over the last decade?
For a social example, P is, according to the police, more common than ever. What has all that social spending acheived??
Zip!
Why?
I submit it's because we are now dishonest, cretinous shmucks. No matter how much the govt depts nanny, their citizens are hoplessly selfish, narcisstic material.
I also submit that this caused by legislative bureaucratic nannying in the first instance.
IMNSHO. :)
Disclaimer: Watching "Cinderella Man" recently may have coloured my opinion of people's "character"!
ReplyDeleteShareholders were once suppliers of capital, but today, shareholders are merely speculators and wealth extractors.
ReplyDeleteThey always have been both.
The workers are always the beneficiaries, because they get the wage. The shareholders carry the risk.
I am interested in your future posts, because you cannot have your cake and eat it.
Thanks for your comments, I guess I will get around to discussing the cake then :-) and see where this leads.
ReplyDeleteA small foray: Shareholders carry risk of their stake, but workers carry risk of losing their job. Look at F&P. Probably quite happy to declare "their people are their assets" and ultimately though, end the jobs and go off-shore. Assets indeed were their staff - seen as a form of property where shareholders have the right of disposal because they are chasing a return.
The one time investment in F&P creates a perpetual income stream, and any improvement made by the workers becomes the wealth of the company, which is "owned" by the shareholders.
Now, I'm not moving into a rant of workers versus capital, just pointing out the way things work in our current system.
And that the players in the systems have changed in times gone by.
It's a false separation, the hoary old worker-capitalist. Both need each other.
ReplyDeleteWhat is important to take on board no matter how tough is that business isn't a charity, jobs aren't charity aid, and there is no guarantee on a business's survival and thus no net to catch it when it fails. Unemployed workers can get dole and move elsewhere, failed businesses don't.
Given the choice between providing jobs but eventually failing in NZ, which then loses BOTH jobs AND capital, F&P chooses to survive, retain its mostly NZ-owned capital and provide jobs elsewhere.
Once upon a time Glaxo was a NZ company.
I'm not trying to separate workers and businesses. I'm examining the power relationship between them.
ReplyDeleteThey might both need each other, but one trades work for a one of payment, the other loans money for a perpetual entitlement to future profits. Many think it strange to even suggest looking at the "natural order", and others panic and think I'm about to turn into a marxist.
This is a conversation worth having though, because whilst the right wing refuse to acknowledge the problems of multi-national corporations, many whose economies are bigger than countries and subject to less control, we provide fuel for the marxists and socialists who are very keen to provide a solution.
Living in a democracy means the best propaganda wins, and things change when people are unhappy. They don't always change for the best.
I'm not trying to separate workers and businesses. I'm examining the power relationship between them.
ReplyDeleteActually, I'm wanting to examine the power relationship between shareholders and business management and workers. More on this later.