>Since the turn of the millennium, most American families have been invested in the stock market. Whether they came to be investors passively (by taking a job with a 401k) or actively (by buying Gamestop shares on Robinhood), the consequences for individuals can be profound. People who embrace their identity as an investor think differently, vote differently, and have different material interests from those who do not. “Investor” can even reframe an entire worldview: education becomes an investment in human capital, and is evaluated based on increases in future earnings potential; family and friends turn into investments in social capital, essentially call options on benefits to be harvested in the future. The capital metaphor becomes pervasive, like microplastics in our water and blood.
Like an investment in familiarity, emotional intimacy, and support? Whether you are spending or investing your time, it is a limited resource that you have allocated. Do you want to allocate it with those who you will never see or share more time or would you like a relationship to form and grow?
You can subscribe to my beginner friendship tier, practically undistinguishable from a real friendship, for $100 a week! Act now, my friendship supply is very limited!
People are friends because of the value they create, vis a vis any relationship requires investment, and its quality is determined based on the return on that investement. I would question the calling of any relationship that creates negative value a friendship.
There is no reliable evidence that this is actually happening on a widespread basis, or that it is being driven by shareholder capitalism. In general it's a good thing for people to own shares in multiple companies as this gives an incentive to act in ways such as voting that are good for the overall health of the economy.
But it's what is happening in societies, that are not even capitalistic. Some people are making "friends" only to gain some material (or equivalent) benefits, parents can view their children as an investment too, even the coupling of nobles in dynasties where politically motivated in the past.
Basically the logical conclusion of neoliberal thought: nothing is worth doing unless profitable, anything not profitable is by definition not worth doing, pretty much replacing what earlier iterations of human civilization called "god" with "the market" as the arbiter of right and wrong and the main organizing force in society.
I mean this in a neutral way - this is basically just Marx's critique or capitalism. The part about small time investors identifying with their own perception of being a real investor is the petit bourgeois dynamic that Marx spoke of, in the era of Robinhood and 401ks. I'm confident the author knows this (and perhaps even takes it from there), and decided to leave it out, probably for a good reason.
The article is interesting insofar as it explores the possibility that increased retail access to equity investments biases a population towards deregulation. But to be honest paragraphs like this one just seem like a distraction and a base appeal to emotion. Investors aren't just biased by their investments; they are bad people, incapable of loving or being loved. I don't think capitalist societies have a monopoly on people who reduce their relationships with others to a series of transactions.
It's unclear what specific policy changes are being advocated by the author. Even if we decide we want to go back to the 1980s (do we? was life that good back then?) how specifically do we do it? Is it just by banning the marketing of securities to retail investors?
There is this thing called "reasonable dosage". A huge hunk of the current problem is the large-corporation- and Wall Street-based financialization of far too much of normal human life.
It feels a little inevitable though, given the other rules of the system: Companies don't become more valuable by having a steady earnings forecast, they become more valuable by having an _increase_ in earnings that is forecast to continue increasing. How can everything always increase? Well when you reach market saturation on one product, start a new product in a different market. What if all the markets seem saturated? Find a new thing to commoditize, a new market to create... Any system where unlimited growth is rewarded is going to try to take over everything it possibly can.
In many ways, the growth obsession is a product of the Reagan-era deregulation craze, and the "Greed is the One True God" ethic that kinda took over Wall Street then. (Try reading some stories about GE before Jack Welch became CEO, and after.) Other big contributors:
- The huge sums of wealth which tens of millions of ordinary people feel they need to accumulate, to pay for their (grand)?children's college education, unexpected medical bills, many decades of retirement and elder care, etc. Compare that to (say) the 1950's.
- The huge structural and social barriers to creating small businesses in most economic sectors, compared to (say) 60 years ago. Back then, how many of the businesses in an average town were (at most) small-ish, family-owned companies?
- How d*mn much "money" is sloshing around the financial system these days, with the "at any sign of crisis, pour in more $trillions" monetary policies of the Fed.
Capitalism, shareholder or otherwise, is a mechanism to optimize production, not a grand model for entire society. This statement does not imply socialism or other forms of heavy central government intervention. Rather, at the start of industrial revolution, and in poorest parts of the world today, having a full stomach and some clothes on your back is the most important thing. But as society becomes more prosperous, priorities other than optimizing production can be addressed, and public companies dedicated to only optimizing shareholder value are not the best tool to address these. Can be for profit and non profit organizations with charter than explicitly ranks different priorities. Can be services by local government, where everyone can easy move if they don't like tax/benefit balance. And so on.
I often wonder what certain industries could be if intensely focussed on "improvement" over profit taking. But then again the most "important" problems/industries are so capital intense without the profit motive I'm not sure who would sign up to fund such an endeavour.
> Capitalism, shareholder or otherwise, is a mechanism to optimize production
This has nothing whatsoever to do with capitalism.
Capitalism is an economic system in which those who invest capital rather than labor or ideas are considered to be entitled to the bulk of the profit from the endeavor. This is defended by the claim that the capital-ists are also exposed to more of the risk, and hence deserve more of the reward. There are strong counter-arguments to this position.
You are arguing against a strawman. Capitalism has little to do with entitlement. Capitalism is actually the only practical system which we have found for efficiently allocating resources at scale over extended periods of time in a way that improves living standards.
The counter arguments to this position are entirely theoretical and have never been proven to work in the real world. Perhaps there is some non-capitalist economic system out there waiting to be invented which could deliver superior results without eventually devolving into an authoritarian dystopia, but I doubt it.
I disagree with the idea that capitalism is a mechanism to optimize production.
In early days, capitalism did contribute to increased production- for example, the role it played in removing the crown's ability to grant monopolies in different fields to favorable subjects, and allowing private ownership at all.
Early monopolies and their place-men held back economic development, and allowing anyone who sees a new need to start a business definitely increased production, but Capitalism is governance by the owners of capital.
At this point, that is again holding back production, as capital owners (like the place men before them) incentives' are to increase their personal wealth even at the expense of production. We see capitalism inhibiting production most clearly in the way private equity consumes and destroys productive enterprises by loading them with debt, using the money to issue enormous dividends payable to the special class of shares held by the firm, and then selling the scraps of the company that remain after bankruptcy. This is also visible in the way that banks no longer offer loans to new businesses unless they have collateral to borrow against, and the flaws in how venture/angel investment works.
When optimizing for production, governments turn to policies that are considered socialist in order to remove these obstacles.
One category of this is stuff like social housing and free education/healthcare which reduce the cost of living for workers, increasing the size of a country's workforce and allowing cheap production of goods & services. Unemployment benefits and support for non-workers (like children and the disabled) also fall into this category, as that allows workers to change employers with less friction.
Other ways are limiting what owners of capital are allowed to do with their property- a prohibition on the Private Equity model of destroying companies would fall into this category, or subsidizing immature industry.
There is a balance between capitalist policies and state-controlled policies, where either side can inhibit production once it has power without responsibility to the citizens it operates on.
> Since the turn of the millennium, most American families have been invested in
the stock market.
The actual percentage appears to be 61%.
Now, that's definitely a majority and so the line is defensible. However, I would say that "most" has connotations that are in conflict with "more than 1/3rd of all Americans are not invested in the stock market".
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It's unclear what specific policy changes are being advocated by the author. Even if we decide we want to go back to the 1980s (do we? was life that good back then?) how specifically do we do it? Is it just by banning the marketing of securities to retail investors?
Incidentally retail participation in public equity markets has traditionally been much lower in Europe and this is something that lawmakers are actively trying to remedy there: https://finance.ec.europa.eu/capital-markets-union-and-finan...
- The huge sums of wealth which tens of millions of ordinary people feel they need to accumulate, to pay for their (grand)?children's college education, unexpected medical bills, many decades of retirement and elder care, etc. Compare that to (say) the 1950's.
- The huge structural and social barriers to creating small businesses in most economic sectors, compared to (say) 60 years ago. Back then, how many of the businesses in an average town were (at most) small-ish, family-owned companies?
- How d*mn much "money" is sloshing around the financial system these days, with the "at any sign of crisis, pour in more $trillions" monetary policies of the Fed.
This has nothing whatsoever to do with capitalism.
Capitalism is an economic system in which those who invest capital rather than labor or ideas are considered to be entitled to the bulk of the profit from the endeavor. This is defended by the claim that the capital-ists are also exposed to more of the risk, and hence deserve more of the reward. There are strong counter-arguments to this position.
The counter arguments to this position are entirely theoretical and have never been proven to work in the real world. Perhaps there is some non-capitalist economic system out there waiting to be invented which could deliver superior results without eventually devolving into an authoritarian dystopia, but I doubt it.
In early days, capitalism did contribute to increased production- for example, the role it played in removing the crown's ability to grant monopolies in different fields to favorable subjects, and allowing private ownership at all.
Early monopolies and their place-men held back economic development, and allowing anyone who sees a new need to start a business definitely increased production, but Capitalism is governance by the owners of capital.
At this point, that is again holding back production, as capital owners (like the place men before them) incentives' are to increase their personal wealth even at the expense of production. We see capitalism inhibiting production most clearly in the way private equity consumes and destroys productive enterprises by loading them with debt, using the money to issue enormous dividends payable to the special class of shares held by the firm, and then selling the scraps of the company that remain after bankruptcy. This is also visible in the way that banks no longer offer loans to new businesses unless they have collateral to borrow against, and the flaws in how venture/angel investment works.
When optimizing for production, governments turn to policies that are considered socialist in order to remove these obstacles.
One category of this is stuff like social housing and free education/healthcare which reduce the cost of living for workers, increasing the size of a country's workforce and allowing cheap production of goods & services. Unemployment benefits and support for non-workers (like children and the disabled) also fall into this category, as that allows workers to change employers with less friction. Other ways are limiting what owners of capital are allowed to do with their property- a prohibition on the Private Equity model of destroying companies would fall into this category, or subsidizing immature industry.
There is a balance between capitalist policies and state-controlled policies, where either side can inhibit production once it has power without responsibility to the citizens it operates on.
> Since the turn of the millennium, most American families have been invested in the stock market.
The actual percentage appears to be 61%.
Now, that's definitely a majority and so the line is defensible. However, I would say that "most" has connotations that are in conflict with "more than 1/3rd of all Americans are not invested in the stock market".
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