#shareholders

Trump and RFK can say that Tylenol causes autism, not generic acetaminophen but Kenvue Brand capital-T Tylenol, and the company just rolls over and says sure, why not, who's to say? No lawsuits, no retractions.

Disney is so protective of Mickey Mouse as a character that they retired their popular walk-around mascot that could talk because some guests were disappointed when they encountered others that couldn't, but when ai slop slingers started using him Disney immediately bent the knee and licensed him out to do and say whatever they wanted.

Elon Musk said he would form a new political party called the “America Party.”

Tesla shares fell Monday after Musk’s announcement.

Stockholders fund major public corporations — true or false?

False. Or, actually, a tiny bit true — but for the most part, massively false. In fact, most 'investment' dollars don't go to corporations but to other speculators. Equity investments reach a public corporation only when new common stock is sold — which for major corporations is a rare event. Among the Dow Jones industrials, only a handful have sold any new common stock in thirty years. Many have sold none in fifty years.

The stock market works like a used car market, as former accounting professor Ralph Estes observes in Tyranny of the Bottom Line. When you buy a 1997 Ford Escort, the money goes not to Ford but to the previous owner of the car. Ford gets the buyer's money only when it sells a new car. Similarly, companies get stockholders' money only when they sell new common stock. According to figures from the Federal Reserve, in recent years about one in one hundred dollars trading on public markets has been reaching corporations. In other words, ninety-nine out of one hundred 'invested' dollars are speculative.

That's today. But the past wasn't much different. One accounting study of the steel industry examined capital expenditures over the entire first half of the twentieth century and found that issues of common stock provided only 5 percent of capital.

So what do stockholders contribute to justify the extraordinary allegiance they receive? Very little. Yet this tiny contribution allows them essentially to install a pipeline and dictate that the corporation's sole purpose is to funnel wealth into it.

The productive risk in building businesses is borne by entrepreneurs and their initial venture investors, who do contribute real investing dollars, to create real wealth. Those who buy stock at sixth or seventh hand, or one-thousandth hand, also take a risk — but it is a risk speculators take among themselves, trying to outwit one another, like gamblers. It has little to do with corporations, except this: public companies are required to provide new chips for the gaming table, into infinity.

It's odd. And it's connected to a second oddity — that we believe stock-holders are the corporation. When we say that a corporation did well, we mean that its shareholders did well. The company's local community might be devastated by plant closings. Employees might be shouldering a crushing workload. Still we will say, 'The corporation did well.'

One does not see rising employee income as a measure of corporate success. Indeed, gains to employees are losses to the corporation. And this betrays an unconscious bias: that employees are not really part of the corporation. They have no claim on wealth they create, no say in governance, and no vote for the board of directors. They're not citizens of corporate society, but subjects.

We think of this as the natural law of the market. It's more accurately the result of the corporate governance structure, which violates market principles. In real markets, everyone scrambles to get what they can, and they keep what they earn. In the construct of the corporation, one group gets what another earns.

The oddity of it all is veiled by the incantation of a single magical word: ownership. Because we say stockholders own corporations, they are permitted to contribute very little, and take quite a lot.

What an extraordinary word. One is tempted to recall the comment that Lycophron, an ancient Greek philosopher, made during an early Athenian slave uprising against the aristocracy. 'The splendour of noble birth is imaginary,' he said, 'and its prerogatives are based upon a mere word.'"

Greetings Tumblrinos, Tumblrinas and Tumblrines. It is I, the Economy Side of Tumblr, here once again with a lesson and a bunch of Thoughts (tm).

Today, yes indeed, we are talking about Shareholders. I'm not talented enough a writer to pull a bait-and-switch on the topic. I mean, I'd need to be a damn genius to start at shareholders and finish at ... welll ... damn near anything, and not lose people along the way. So yeah, shareholders. What they should be (good), which is also what they aren't (the fucks), and what they actually are (bad).

First off, why shareholders ? To finance stuff.

See, the Economy has this deplorable tendency to not manifest resources out of thin air, which is very unsexy of it, I know. Part of it is the (equally unsexy) laws of physics that prohibit the spontaneous manifestation of material resources. Science fiction can sometimes daydream of days where we mine stuff straight out of the quantum foam of appearing and disappearing ... quantic ... thingy ... stuff ... but that's a whole bunch of years, decades, centuries, mayhaps even millenia out of our reach, so that's not an option.

I know, tragic.

The other part of it is the (still very unsexy) laws that limit the amount of economic/financial resources in existence. Because, while we COULD create digital money out of nowhere, just add a couple zeros on a bank statement, that has even LESS sexy effects, like making money worthless and making bread prices reach six digits. That sound you heard was France and Germany, both countries very passionate about bread, wailing in horror at the idea (and traumatic flashbacks for Germany).

So, since you can't manifest financial resources at will, and your own resources are limited, sometimes you need investors. Those investors can either be paid back with money - in case of a loan - or be offered a part of the company. A slice. A piece of it. A share.

BAM : shareholder. The investor is indeed holding a share. And if the share is French and costly, it's a share that's chère. A chère share, if you will.

So, that's the basic idea. The shareholder brings money to the table for investment, and in return gets a piece of the company. Due to holding that piece of company, they get a piece of the benefits, you know, to make sure they don't DEMAND to be reimbursed for their money and leave the company dry on cash and, worse yet, trust and credibility.

Lovely.

But Admiral, you say, when do you start explaining that they are leaches that drain the Proletariat of their labour and that we have nothing to lose but our chains and THE INTEEERNAATI-*frying pan bonk*

We're not here for Communism. I have thoughts about it that I may share to explain why Communism doesn't work, but most importantly : we're here to look at our reality.

So, are shareholders good, or bad? Well that depends. That depends a LOT, mainly on how they act. See, you can find two extremes of behaviour of shareholders, and a whole lot of intermediate situations. So, what are the extremes of the spectrum ? I propose the sedentary shareholder and the nomadic shareholder.

The sedentary shareholder stays with the company, it is their hill and they will fight to the last for it, and if the hill sinks they'll sink with it damnit! Yes, it's generally boats that sink, but we're on the high seas of the Economy, Hills have sails too. Even buildings can have sails, just look at the classic 1983 documentary The Crimson Permanent Assurance.

So those sharehodlers will hold to their investment, to their company, with unrelenting loyalty. Most often, those shareholders are found in 'familly companies'. No, I'm not talking about 'we are familyyyyyy so work 16 unpaid hours of overtime' company, I'm talking about companies that belong to one or a few families. The companies that make up most of the German SMEs, a bunch of European luxury brands, that one Japanese inn that's been managed by one singular family for over a millennia. That kind of family company.

In that case, the main goal of the shareholder is perennity, making the company long lasting, making sure the kids and grandkids and great-grandkids will have a company to rely on. Passing stuff down. Inheritance. The company itself is the value passed down to future generations.

On the other end of the spectrum, you have the nomadic shareholder. I'm calling them nomadic because I'm considering making an academic paper on it, and calling an entire slice of the economic spectrum parasitic and destructive locusts reduces chances to be published quite severely. But you, my beloved Tumblrite students, you know what I think. Those shareholders are loyal to one thing only :

And that means that when the hill has been strip-mined, they won't stay on it, they won't fight for it and they certainly won't die on it, they'll fuck off over yonder to hollow out another hill. They're sometimes called vultures, but vultures typically take care of carcasses, they don't mug healthy animals to eat them alive. Those shareholders, they do that.

A good exemple would be what a bunch of US pension funds did to European industrial companies in the late 90s/early 00s : they came in, bought a healthy company that may not have been the most profitable but WAS profitable, butchered it for financial parts, sold the machines and the patents, shuttered the company, bringing in profits to pay dividends and then ... moved on to the next prey.

Now, like I said, these are two extremes, and most actors fall somewhere in between. They'll hold shares of performing companies, and leave poorly performing ones. It's hard to systematize honestly, because the degree of nomadicity will vary from individual to individual, and depends on personnality, strategic goals, economic situation, reserve funds, and a host of other factors.

Most economic actors will act much like real life nomadic or semi-nomadic people, taking care of their flock of investments to harvest dividends like the Mongols harvest wool and milk from their herds, sometimes one investment will be sold off for liquidity like a Kazakh might slaughter a sheep for meat. More sedentary investors will have a couple investments that they care for unflinchingly, like a little plot of farmland they care for through thick and thin. It's very mixed. Very bucolic, if you stick to the metaphor.

The issues arise, especially, with the ultra-nomadic investors, the ones that do not stick to an investment, but to a profit margin.

The economic ideal, the theory, is built around a shareholder that has a symbiotic relationship with the rest of the Economy, that provides financing where it is needed, that supports economic development and job creation. Those investors haven't disappeared, they are even fairly common.

But shareholder-centric management is now the most common form of management for large companies, going hand in hand with the financiarisation of the economy, and that's a MAJOR disfunction of the Economy. Because instead of shareholders supporting the Economy, you end up with the Economy supporting shareholders. That's ... that's the wrong way around.

Economic activity requires labour AND capital, these are the two factors of production, the two economic forces. If you over-favour one over the other, you end up with an Economy that disfunctions itself into a ditch. There's also the fact that ideologies that over-favour one over the other tend to do so for populist reasons and look to establish dictatorships, but that's political, not economic.

Black Market Voices proudly presents our first OC comic dub!

Art by the talented @simplyfurnituredirect

…Biblically accurate angels and unchecked capitalism totally count as cosmic horror, right?

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Cast and crew: - Flamia as the Guardian Angel AO3 Tumblr

- Editing by Flamia

Created and posted with permission from the original artist