Ive often seen individuals on the left talking about how billionares shouldnt exist etc., but when probed on how that could be accomplished the answer is usually just taxes or guillotines. I dont think either is great.
What if instead, corporations were made to be unable to be sold or owned. Initially theyre made to default to popular election for their board, and after that they can set up a charter or adopt a standard one, ratified by majority vote of their employees.
Bank collapse would probably follow, how could that be remedied? Maybe match the banks invalidated stocks with bonds?
Maybe just give rid of the 2ndary market. You can only buy stock directly from the company, and you’re entitled to a % of profit share as a result of that. When you’re done, you can sell the stock back to the company
A return to pure value investing would be incredible harm reduction about, I dunno, sixty years ago. Nowadays the derivatives market is so much larger than the actual market that any attempt to unwind it might literally collapse the entire global economy
At least some of that is tax rates. A few tweaks to unrealized income and losses, capital gains and losses, treatment of dividends, and we can step back from the brink of “financial engineering” and get back to using the profit motive for actual engineering. Basically repeal most of the tax changes since Reagan
Whisper of a dream
Why don’t you think taxing the super rich is great?
answered this one here : https://lemmy.world/comment/17993835
The “make every company a cooperative” concept has been proposed before. For certain companies it could make sense, but it gets a little tricky when it’s anything that needs significant funds to get off the ground.
Corporations were invented for a reason: it creates a mechanism whereby investors can put money in up front in exchange for a share of possible profits once the venture gets going. For example, that makes it possible to build a billion dollar nuclear reactor with 100 staff people who couldn’t each pay 10 million dollars.
The mechanism that creates billionaires is only sort of related. Elon Musk, for example, built up his wealth through tangential involvement with a series of really successful companies.
i think an easier way would be to limit stock trading to once per fiscal quarter.
stocks were invented as a way for people to invest in things they believe in, and get some money back as thanks. with the advent of rapid trading, the economy has become hopelessly slaved to the ticker; the business is no longer what makes value, value is what makes value.
it’s all turned into speculation. eliminating that part would go a long way.
If I’m not mistaken, the US has the beginnings of this in place already in the form of taxes on short-term investments. I’m by no means a tax expert, but this could be a starting point, maybe.
Yeah make minimum holding periods.
I still think capitalism is a useful tool. But by are we letting it use us rather than the other way around?
Government was arguably created to establish a market, needed for any economic system to work. You need consistent legal structure, money, a way to do business.
But our failure is government getting owned by the market rather than shaping it for the good of their constituents. Let capitalism be our tool in a market that factors in externalities, fairness and that rewards work.combine that with a progressive tax system like what we claim, and things are looking up, with what seems like minor changes.
- why does the market fail to account for environmental destruction in the cost of doing business?
- why is the market based on a legal structure that exploit individuals?
- why do the richest people have the lowest effective tax rate?
You just reinvented a Co-Op.
However, at what level does this get enacted?
Does little Tommy’s summer lawn cutting “business” with his 3 neighbors as customers need an elected board in order to operate?
If I run a business and need a secretary to take care of some mundane things while I do the actual money making part of the business, doors that secretary suddenly get 50% vote over all decisions?
So to answer your questions
- Depends on how they have their business registered. I once worked at a company that had 7 people total working there, but because it was legally a corporation it had a “board”, which was just the 3 guys who owned the company.
- Not necessarily, going back to my previous answer, but there is no legal requirement to sell your stocks when you hire someone. And if you decide to sell stocks you can do a private sale of any amount of the company that you want.
Just because a company is a registered corporation doesn’t mean their stocks are sold publicly. But because they are a registered corporation, they have to have a board.
The op did not mention only companies that would be publicly sold. It said ALL OWNERSHIP of companies would be banned. So yeah, people can currently register their companies in whatever way they wish, but the op removes all the options that make the most sense for small companies. And I bet your example was just a partnership, and they wanted to feel fancy by calling it a board.
Oh, I didn’t see the no ownership thing. Yeah that’s dumb haha
Your questions at the end are what distinguish this from a co op.
Im not saying i have an answer for every case, but a co op has strictly one vote per employee.
I think itd be okay to build on top of that and let co-ops of more than 2 people set up some sort of charter or constitution that requires periodic re ratification.
3 is the minimum amt of employees that makes sense imo.
I would be happy of your stocks got a new basis every year. The delta between the old basis an the new basis is ordinary income and you owe taxes based on that income.
Just go back to needing futures to actually be fulfilled in kind.
And maybe limit/outlaw complex financial products.
These would be a solid start to fixing the issue of the unsustainable, and irrational, not to mention unconstructive economic growth of the last 60 years.
Honestly, I’m on the opposite end of the spectrum. Completely deregulate markets. This would make the stock market a constant churn of volatility and pump and dump schemes. It would gain a reputation for being a scam. People would be forced to once again invest in local businesses where they actually knew something about the owners and the conditions on the ground. Large financial collapses would cease to be a thing, since a small collapse in one city wouldn’t affect the next city over
scam=people stop investing
Crypto, blockchain products, NFT’s, magnetic bracelets, alkaline water, magic crystals…you are severely underestimating the average human’s ability to be constantly scammed
Even if we ignored the immediate collapse of the world economy, if you were starting from scratch how would you get anyone to take risks and put money/time into creating a business?
Even if people did decide to do it, no banks would be able to lend to you (what banks? They need a massive amount of money to start) as they would have absolutely nothing as collateral.
How would you get anyone to take risks and start a business
People create things all the time without a profit motive. Assuming they have a good safety net behind them that allows them to start up there ideas people will create. Case in point the app were on right now, it’s developed open source with no profit motive, no stocks, no company. It’s built by a bunch of hardline communist who believe in an open social network.
What banks
There are credit unions that function as co-ops with no stock ownership
they would have absolutely nothing as collateral
Co-ops can have collateral just like any other business, property of a store or factory, stock ( in the product sense ) etc. Yeah we wouldn’t have silicon valley with vcs betting millions on unproven tech, but do we really need that?
Also this is all assuming there’s no state involvement or planning. The state has a great credit line that it can use to backstop loans for small cooperative enterprises or just create the enterprises itself, eg. City run grocery stores like zohrans been pitching.
That’s fair.
Didn’t think about coops, I assume that if they went completely underwater their creditors would still own them though.
Could all still work, but could be clunky, would probably all get worked out in time.
if they went underwater
Bankruptcy would work the same as it does with a stock company. Since Bankruptcy is just liquidating all a companies assets then forming a queue of people with claims to that money, with secured debt holders at the front of the line and stock holders at the back, you’d just remove the stock holders at the back, maybe replace them with the employees to give them a sort of “severance”
But why would people take loans out to start businesses if there’s no way to pay the loan back? Where is any profit from the business going?
Without ownership of a company there’s no reason for anyone to start a company and take on all the risk.
aLl ThE rIsK
The owners are risking their fuck-around money. The workers are risking their shelter.
You think everyone that starts a business are rich already?
The people taking the risk by starting the company are the ones risking everything, not the employees that they hire lol
“Rich” is a relative term. But nobody starts a business when their basic needs aren’t already met, because they literally wouldn’t be able to. That inherently makes them richer than the job seekers.
People start businesses all the time when their “basic needs aren’t met” because they need to earn money to be able to meet their basic needs.
why would anyone take out loans to start a business if there’s no way to pay the loan back?
The co-op would pay the loan back and treat it like any other cost of doing business, like buying components / ingredients or paying rent.
where is any profit from the business going
It would go to the employees. There would be no profit in the typical sense of revenue - costs - payroll, any excess after costs just goes to payroll
without ownership of the company there’s no reason for anyone to start a company and take on all the risk.
People start companies / organizations all the time where there main motivation isn’t profit. Your average restauranter is not doing it for the money, if they are they’re delusional. They do it because they like cooking / food or want to create a space for people to gather. Sure some people are motivated by making a profit and we’d miss out on there businesses, that’s the cost of a more equitable society. Marx himself praised the dynamism and creativity of capitalism but didn’t think it was worth it for the working class who could get far more of the pie if they weren’t giving a cut to the owners. This is becoming more true as that dynamism and creativity is going towards AI garbage and crypto and financial schemes
As for the risk, most of the financial risk of owning a business is shed when you create an LLC. The other risk of making no income while the business is getting off the ground can be mitigated by a social safety net that allows people to pursue these enterprises without worrying how they’re gonna eat or pay rent.
So every business is a co-op, but only one person takes out the loan to start the business? So only 1 person is on the hook if it fails, but everyone benefits if it succeeds?
It would go to the employees. There would be no profit in the typical sense of revenue - costs - payroll, any excess after costs just goes to payroll
But this is the same as all of the employees having stock in the business. It means if the business turns into the next amazon, all these employees will be - get this - billionaires! Isn’t that precisely what OP is saying they don’t want?
Your average restauranter is not doing it for the money, if they are they’re delusional.
They absolutely are, because they want the restaurant to provide for them. They don’t open a restaurant with the dream of working another full time job as well as running the restaurant so they can pay their bills.
The reason people start businesses is so they can be their own boss and be financially independent. It is always about money, unless they already don’t need the money.
Marx himself praised the dynamism and creativity of capitalism but didn’t think it was worth it for the working class who could get far more of the pie if they weren’t giving a cut to the owners.
Cool, now show me the communist countries where everyone is equally wealthy and there is no poor underclass and no super rich upper class rulers.
As for the risk, most of the financial risk of owning a business is shed when you create an LLC.
It absolutely is not lol.
by a social safety net that allows people to pursue these enterprises without worrying how they’re gonna eat or pay rent.
Ok so now you’re talking about a UBI, correct? That’s fine, I think a UBI absolutely needs to be trialled and explored - but that’s got nothing to do with the absurd notion of getting rid of stocks. Even with a UBI, loans from failed business startups would bankrupt you and make you lose everything.
only one person takes out the loan
No, a group of people would form a co-op, just like how people form a company, and the co-op would take out the loan. Entities can take out loans just like people can
but this is the same as all of the employees having stock in the business
No, stock is transferable and sellable, and not equal. If every employee got stock then one of them could / would sell it to someone with cash upfront. Now that new person is now getting money from the business without contributing any labor. They can then use that money to buy more stocks and make a passive income off the company. This leads to capital accumulation and a class of people making money off other people’s labor just because they have more money, or had more money at the start.
As for Amazon the average employee would be making a lot more then they are right now but they wouldn’t be billionaires. Billionaires never make there billions off working, they make it off capital gains, and since the shares aren’t sellable, and thus have no monetary value, there’d be no idea of capital gains for a worker in a co-op.
For the restaurant example I agree they may want to start a business for economic security, but thats not the same as getting rich. Economic security can be provided by a social safety net.
I also agree they may want to start one because they lack autonomy, but I’d say that’s largely the result of the alienation of working in normal stock owned companies where the owners make the decisions. If you are working in a co-op and get to have a say in all the decisions that alienation is partly ameliorated. If you want a hand in more decisions then you can “run” for a managerial position and get elected, administrative work would still be necessary in a co-op.
For the communist question most communist countries were more equal then the capitalist countries before the cold war ended. They were poorer, that’s partially due to inefficiency, but also due to the fact that most of them developed later then the capitalist countries there often compared to. If you look at one of the last hold puts in Cuba it could be argued that the quality of life for the poorest there is better then the poorest in the u.s. as they have better access to food, housing and healthcare. I’m not going to defend the oppressive political regimes of those countries, but the standard of living wasn’t as bad as a lot of people make it out to be.
Could you explain what financial risk is still there if you make an LLC? My understanding was the whole point of an LLC was to guard someone’s personal assets from risk if the company goes under.
Oh so now you need a group of people to decide they want to start a business and take out a loan? So right there we’ve now eliminated small businesses run by a sole trader, yay? So now you need a bunch of people to all put their livelihoods on the line, and as soon as they hire more employees their share of the co-op is diluted while their loan portion is not. Again - yay?
So if one of the original starters quits or is fired from their job, what happens? What happens to their part of the loan? Do they get a payout when they leave? If not, again, why would they ever take the risk?
For the communist question
So there are no communist countries that exist where everyone is equally wealthy and there is no poor underclass and no super rich upper class rulers? That’s what it sounds like to me. Hmmm, I wonder why communism has failed literally every time it has been attempted? But I’m sure this time communism would work, right? The others just didn’t do it right, right?
Could you explain what financial risk is still there if you make an LLC? My understanding was the whole point of an LLC was to guard someone’s personal assets from risk if the company goes under.
You can’t just make an LLC, take out a huge business loan, and then wipe your hands of it if the business the LLC runs goes bankrupt lol.
I don’t think your understanding how this works, the loan is on the co-op as an entity, not the individuals. A single person or group of people can form a co-op, just like how they form an LLC. That co-op can then take out a loan just like a company can take out a loan. That loan is the co-ops liability, not any of the members. If any or all of the original members leave that loan will still be on the co-op, the original members will not be responsible.
I think you have a misunderstanding of limited liability in general, per wikipedia:
Limited liability is a legal status in which a person’s financial liability is limited to a fixed sum, most commonly the value of a person’s investment in a corporation, company, or joint venture. … A shareholder in a corporation or limited liability company is not personally liable for any of the debts of the company, other than for the amount already invested in the company and for any unpaid amount on the shares in the company, if any—except under special and rare circumstances that permit “piercing the corporate veil.”
So yes you can just make an LLC , take out a huge business loan then leave and wipe your hands of it. The bank knows this and that’s why when they give out loans they evaluate whether the company can pay it back, not an individual. The loan will also probably come with stipulations ensuring some sort of corporate governance so you personally can’t just drain the company account and walk off with the money. Doing that would be embezzlement.
As for the communist question, were soviet style communist countries perfectly equal, no, but the situation your describing of a poor underclass and super rich upper class rulers is way more reflective of capitalist countries then communist ones. Yes there were high ranking beuracrats at the top but they weren’t living in the lap of luxury, the highest ranking soviet officials lived in the house on the embankment where the largest sized unit was 3,200 square feet and the average unit was 2,000 square feet. Compare that to a millionaires mansion in the u.s. Communist societies were far more equal then capitalist societies and the idea that there’s some gang of rich exploiters at the top hoarding all the resources is your projection.
With a proper UBI and social safety net they’d be raking much less of a risk.
im definitely interested in not collapsing the world financial system, but its a tough problem to find a solution to.
there are other assets besides stocks banks could own - loans would definitely be a much bigger part of the pie.
As for starting a business, itd make sense to only hire on people you trust at first. Afterward you have to continue to show your worth not to investors but to employees.
As an alternative to trust, you could cut your own business a loan, so that if youre ousted as long as it doesnt go tits up you still get a payout.
I read this as “socks” and thought “What the hippy shit is this?”
Then I realized my error but still wondered the same thing.
I wish I could live the rest of my days without socks.
I was also wondering if this is a continuation of the socks as a social construct thread.
Unlike you, however, I don’t consider the idea to be “hippy shit” at all. In fact, I’ve often thought that we might be better off without corporations. Entrepreneurship is what we need, not impersonal investment.
This is called a cooperative
Except not just control but ownership too, there is no division between owner and employee.
And yes I agree with you, it would be a good idea. The economic system I advocate for the most is cooperatives in a free market.
It becomes very hard to form a company of any reasonable size without government intervention. At that point, corporations that form need tight relations with the government.
The stock market shouldn’t exist. Fight me.
The stock market isn’t the root of all evil - it’s just one way for companies to raise money and for regular people to invest in those companies. Without it, businesses would still need funding, but the money would come from a much smaller circle of the ultra-rich and private investors. That would make the system less democratic, not more.
If we got rid of the stock market, we wouldn’t get rid of corporate greed or wealth inequality. We’d just move them into darker, less transparent places - behind closed doors instead of in public view. Ordinary people would lose what little access they have to ownership and wealth-building. Rich people would still get richer, just in ways even harder to regulate.
So if the goal is to make the system fairer, abolishing the stock market isn’t the answer. Reforming it might be - but killing it outright would probably just make things worse.
Agreed. Like so many things, I think law enforcement can help rein in the stock market. If there were a way to move the SEC under maybe the Fed(?) and require full funding of the agency as the cost of doing business on any stock market in the US (with similar institutions in other countries). Probably a flawed idea, but I think the goal is sensible: remove the SEC from political ambitions and whims and make the market directly fund its regulatory adherence.
Also more people need to suffer severe prison sentences for financial shenanigans. We also need to go back to separate deposit and investment banks.
I’m not saying it is. But everything that offers the chance will be abused. And the way it currently exists, it shouldn’t.
Currently it’s just a massive machine for people with massive money to get more, channel money / misdirect analysis / hide and exploit all others. On paper one might disagree, in reality though…
Investing in the stock market isn’t something exclusive to the rich. For someone like me, it’s pretty much the only realistic way to build any significant wealth for retirement. Without investing, I’d just be losing money to inflation by keeping it in a bank account. Now that I’ve got it invested, I’m already earning enough in returns to cover a few months’ wages each year. It makes no sense to want to take that possibility away from everyone just because you despise billionaires.
I understand and am happy for you that you see a benefit in this for you.
However, I came to the conclusion that it is trivial for those in power to simply fuck you over on occasion. If you’re a small investor and lose, we’ll tough luck you signed up for it. If you’re the bank, oh dear, we need to rescue it! There are various examples of crashes and closures but it really is fine to have a different opinion.
I just wanted to state I am not having mine simply for fun and did quite some research and also worked in a critical financial field once where made up money in a global scale was proven.
As you will also have your background for your opinion. That’s fine!
Fight you?
Brother, I’ve come to join you.
C’mon, surely we can find something to disagree over for some good ‘ol’ leftist infighting.
Maybe if you believe in woo woo shit like crystal healing. 🤣
Poor people are poor just because they don’t know how to participate in the stock market. Fight me.
I fully agree!
However, participation requirements for winning include:
- Knowledge (obviously)
- Having a lot of money in the first place
- Having power to influence the rules and / or market
Both point 2 and 3 are false. You have examples for both in the current US affairs. Please elaborate if you know something that the rest of us doesn’t.
Holy crap your effing president is running pump and dump schemes and a lot of politicians made wins on stocks that they Coincidentally sold or bought with the right timing.
Do I need to explain that?
That is blatant misuse of power and conflict of interest.
That’s corruption, and it’s totally something else, but nevertheless there might be others who had no idea, but had the stock at the right moment, and sold as it was high. So, even in cases where the powerful play, the small ones, if lucky, could massively win.
On the other hand, you had the worlds wealthiest man, being second hand to the most powerful man on the planet, and he lost billions. So… I wouldn’t call those that much significant. I bet there are tons of smaller examples where CEO’s manipulate the stock of their own company that fly under the radar. But overall, in general, especially if you invest into ETFs (groups of stocks) you will barely notice anything and life goes on as usual. And the usual is 6-8% win per year on average.
That’s fine, let’s just disagree.
My point besides the corruption would be a massively rigged system. Yes, you can have wins. But that does not make it better or even - and that was the point before - people who don’t use it incapable to do so.
They might also want to stay clear from it, wisely.
Could be, but in the end, no risk no reward. People who do risk, are the ones who get rewarded.
Why not instead have public and/or worker ownership of stocks, as the Meidner plan proposed, or in the form of a Social Wealth Fund as Matt Bruenig at the People’s Policy Project has suggested? This give people both democratic control and socializes the profits. As long as we have corporations, having them owned either by the public or by their workers (in the form of cooperatives) seems like the way to go.
I think the people that built a company are better qualified to elect their ceo than the bulk populus. Gotta be democratically elected by workers imo, though a simple majority isnt always the best way.
Well that would eliminate the whole point of corporations, which is to make it easy to raise money.
Let’s start with an understanding of why corporations suck in the first place. The root of all good and evil in a corporation is limited lability. This allows investors to not have to worry that they’re going to lose more than their investment, so they don’t need to think too hard before putting their money in some company they just heard of. This is great for investors and for the corporation.
But this comes with a cost to everyone else. There’s the direct cost that if the corporation ends up owing people money through excessive debt, negligence, or illegal activities, they can declare bankruptcy and the investors don’t have to worry any paying for those (other than their losses on the stock). But I suspect the more pernicious effect is that the investors’ lack of concern over their investment as anything but a vehicle of profit basically leads them to pick sociopathic CEOs and demand profit maximizing behavior at the cost of social good and even long term stability. And since all this sociopathic activity is really great at amassing money, it’s kind of a big power boost for sociopathy overall.
However, the ease of investing can be a good thing for society too - basically it allows a lot of people to retire at some point, and allows for rapid funding of new ideas. So is there a way to get corporations back under control without throwing out the baby? I tend to think we should tax corporations higher if nothing else, as it is we do the opposite thanks to Trump’s last tax cut plan.
I dont think taxing them will accomplish much. its also trivial for corporations to evade taxes, and all of the big ones do.
I think the ease of raising money is part of the problem. Loads of tech companies way over-raise, and develop into bloated cancerous messes that have no way of ever realizing the growth that would have to exist to warrant the investment theyve been given.
In the first place, the only way their investors even expect make anything back would be by reselling the stock, making it a ponzi asset.
The entire system is just propped up by peoples 401ks being funneled to institutional investors. Its inherently unstable.
Make social security good enough that middle class citizens dont need to invest, and the overinflated value of stocks plummets back to earth.
