Shareholders are Evil
Thursday, July 31st, 2008 at 1509I’ve said many times to many people that the system of “Shareholding” is the root of almost all evil. See, my logic is that if someone is involved as a purely financial shareholder (And not as a founding director, for example) then their only interest in the company at all is the financial performance of the company. This leads to many things. Support for wars, calls for shameless exploitation of children in the East, rapacious polluting of local rivers and streams to save expenditure on those pesky environmental regulations.
Why? For profit, of course. Altruism and decency go out of the window when an abstract EPS (Earnings per Share) becomes your sole interest.
So it’s no wonder I regard with some frustration our wonderful government turning over of essential, national supplies such as water, gas and electric to private shareholder motivated corporations. “Competition will keep prices down”, they hark, without realising that they’ve simply established a co-operative monopoly with only one interest: Profit.
See, the energy companies have a complete monopoly, even if they are acting as individual corporate entities. Why? Well the vast majority of the population have no means by which to adequately generate their own power, pump their own clean water, or supply their own clean, burnable gas. There is simply no competition, which means energy companies can do what they want with the prices and justify them however they please. In the case of these rapacious shareholders they’re claiming that freezing Grandma to death this winter is because, quote:
“This is a business that has got a million shareholders – a lot of pension funds and people have got their savings invested in British Gas shares and we have to look after them”
So clearly, their intention is to look after those people who have a stake in their company at the expense of the quality of life of the citizens of Great Britain. Is that really the attitude we want to see from the providers of essential services? The components of national infrastructure that contribute to basic qualities of life should never be placed in the hands of people who have no interest in the good of the people, it’s madness.
A democratic government has an obligation to its electorate, the majority, not the wealthy elite, yet time and time again we see them sacrificing essential public services in the name of “financial competition” and profits. As we charge headlong into plutocracy my advice to anyone out there is to get wealthy or learn how to survive without Oxygen, as sooner or later they’re going to start charging for air.
There is constant drive within companies to do better than the previous financial year. The bonuses paid out, particularly to the upper echelon of management are often based on this and of course it drives the share price up.
It’s been long critized that this kind of reward or drive should be abandoned since it’s blamed for the reckless lending that’s driven us into this credit crisis at the moment. Its a blatantly flawed and stupid system, because whatever goes up must come down.
As for the state of this country. Well, it’s pretty much fucked tbh. The government is up to it’s eyeballs in debt. Not even pulling out of Middle East or cancelling the NHS Spine system will help now. It embarrassed itself by nationalising Northern Rock with money it clearly didn’t have. Can’t see it nationalising anything else right now. I guess our only solace is knowing that however bad it is us, the American government is worse – they are trillions of dollars in debt. The French have it bad as well…
Couldn’t agree more with that post, was doing research for my own post regarding the evil of shareholders, and hit the nail on the head!
True democracy is lost, instead democracy is funded by big business, in the UK alone we have seen how the current UK labour government belittles the very people who put them in power. There are too many career politicians, who are there to get paid, not because they actually care.
Too often we have heard about how Gordon Brown has discussed how prudent he has been about the economy, to be honest with you, who does the economy benefit? Big business, not the working class, perhaps he should have been more prudent with regard to the social problems in the UK? Or had a more prudent policy on immigration? Instead he looked after the one thing which the voting majority have no keen interest in – big business!
[…] So when did shareholders become so evil? […]
Hurrah .. another capitalist bashing exercise!
One question … where does all the money come from?
I mean. Lets take a company like Marks & Spencer. Worth lots and lots . So lets assume for a minute that it is owned by the “founding directors”.
What happens when that director dies? Or quits? Or gets fired? There is also the possibility that the company is simply too damned big to be owned by a few people. All you end up doing is creating a small number of power-mad people, with the crushing problem that they not only control all the shares, they control all the power too! (and absolute power corrupts absolutely .. don’t forget!)
Now take this into the context of the utilities that you are so fond of picking on. British Gas used to be a national company. There are no founding directors. The Government (which you blame for pretty much everything else) admitted that it was not qualified to run a massive corporation. It could not compete because it ran at a constant loss (which burns more “public money”) and swapping out all the “managers” with each general election made for a dangerous environment for a corporation. None of the large national companies lasted for very long, and this is the exact reason.
Private investors however … they have a much more professional approach. Their ass is truly on the line (it’s their own money they invest, or at least they are liable for it, as opposed to the government who loved spending everyone else’s money).
In order to create competition, the government split the industry up into multiple companies, and allowed others to penetrate the market. It’s technically an oligopoly, not a monopoly, And the Monopolies & Mergers Commission (not to mention the regulatory commissions) are supposed to keep it that way, along with keeping tabs on prices and competition, to make sure it doesn’t get out of hand. If you hate Centrica so much, go to EDF, or Scottish Power, or nPower.. If there is (oligo)(mono)poly abuse, blame the government!
As for shareholders, where do you think the money comes from? It’s all about investment. You cannot possibly expect a private company or individual to invest £billions and expect absolutely no return. Any financial outlay should return something in the way of profit, otherwise they will just take their money somewhere else. The end result of that? British Gas shareprices drop, the company becomes worthless, has no investment potential and eventually falls apart. (which is what we’ve seen with all the banks recently)
The money originally comes from pure invention. Come on, you should know this… Government issues bonds, reserve issues notes out of thin air, banks multiply this up massivly thanks to the fractional system…
You don’t really address much besides, quite correctly, stating that it’s not a monopoly. A plutocracy, perhaps, unless you’re prepared to consider the corporate super-wealthy as a single entity as I am often guilty of.
My point was not to propose a better system, but simply to highlight that they very system of shareholding promotes the notion of “I give you some money, you give me back more money and I don’t care how you do it.” Corporations collectivly have been identified as operating in psycopathy, irresponsible shareholder behaviour fuels this.
Responsible operation of a company would mitigate some of the problems, but if the very makeup of a corporation is that of a psychopath, it will operate for its principal cause (Profit) without regard or acknowledgement of how this is achieved (Human and environmental exploitation). The companies that do decide to trade ethically are not as profitable as those who do not and are ultimately “less successful” in the eyes of the markets, eventually succumbing to pressures from the free market to slash prices, increase margins and streamline workforces. Another pet hate of mine, growth as a measure of success…
Perhaps I should have clarified my original post with “Most Shareholders are Evil”, as there are certainly people out there prepared to take a hit and invest only in ethically and responsibly operated enterprise. However, the state of the world at large suggests these people are in an endangered minority. Afterall, so long as it’s not your own kid losing his arm in a Nike-Owned Phillipino shoe factory, who gives a shit, right?
I wouldn’t protest responsible and ethical investment, but the system neither demands or encourages it. If it makes you any happier, I’ll correct my original statement that “Most” shareholders are evil. (Where “Most” tends towards “All” like Tan (pi/2) 😉 ) The ones I refer to are interested only in their ROI, whatever the cost. Try telling me that isn’t callous.
I never said it wasn’t callous, but the main problem is that no alternative is remotely manageable.
You could do better whining about the 3rd world, starvation, war, famine, abuse and genocide.. those things are far worse!
The problem with both problems is that .. they will NEVER stop until EVERYONE (or at least the vast majority) feel exactly the same way .. and that STILL won’t stop the annoying bastards who have the power and don’t care either way.
In short, unless people (i.e. “man”) stops being inherently greedy and selfish worldwide, we will never live in utopia.
Why whine about the results (War, famine, starvation, abuse, genocide) when you can complain about the cause (Corrupt capitalism, corrupt government, corrupt globalist politics) ?