Monday, October 19, 2020

875: Shareholder's Capitalism Falls Apart....

 After discussing the worrisome developments with respect to liberal democracy let's have a closer look at the economic developments and changes.


Communism is the school example of a state controlled economy.. The Soviet Union was famous for its five-year plans.


Communism failed as an economic system and it had to give more room to a free market system, to more material prosperity for its citizens.


Although still state controlled the Chinese economy seems to follow a similar scenario. You can imagine, that neoliberal economists were cheering.


In 1962, the economist Milton Friedman wrote “there is one and only one social responsibility of business – 


to use its resources and engage in activities designed to INCREASE ITS PROFITS so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud.”


This line turned into dogma in the 1980s, when Friedman became an adviser to President Ronald Reagan, and his thoughts on deregulation for the purpose of market efficiency became law.


The maximization of profits became the holy grail of corporations. The profits increased indeed spectacular.


However the wages of the people who produced those profits stayed the same, except the wages of the topmanagers. Most of the money went to the shareholders, to those who already were rich.


Public sentiment began to change en masse when the financial crisis of 2007-2008 brought to light the staggering level of income and wealth inequality, as Picketty has confirmed.


The Business Roundtable is an association of CEOs of many of America’s largest companies, among which Apple, Google, IBM etc.


This organization has come with a statement, signed by 181 companies in 2019.


It is the first statement to reject “shareholder primacy,” a theory that states that a public company exists solely 


for the benefit of shareholders, which has guided corporate governance for the past four decades. It should exist for ALL stakeholders like customers, employees, and communities.


The belief in the free market and the alleged beneficial effect would lead to better prices, healthy competition and increased efficiency everywhere 


has proven to be a failure in education, health care, social care, nursing homes and the like. People are now reconsidering this belief.


This economic system is not the solution for solving the huge problems of climate change.


 Governments have to act and it is not realistic to expect, that the free market and its market forces are capable (or willing) to go for environmental conservation and climate recovery.


Shareholder capitalism has passed its expiration date. That is what these 181 corporations at least admit in words.


There is a lot at steak. Now it is wait and see, what the deeds will be of big corporations and the happy few on this planet....


Thank you for your attention again.....


MacMillan The Encyclopedia of Philosophy, 2nd edition
Routledge Encyclopedia of Philosophy, 1995
Gabriel van den Brink:"Ruw Ontwaken uit een Neoliberale Droom",, 2020


The Discussion


[13:18] Gemma (gemma.cleanslate): wishes it were so

[13:18] Particle Physicist Bejiita (bejiita.imako): hmm indeed

[13:19] Gemma (gemma.cleanslate): still going on

[13:19] Particle Physicist Bejiita (bejiita.imako): but greed seems to win as usual

[13:19] Gemma (gemma.cleanslate): crops buying back stocks too

[13:19] CB Axel: I have trouble believing that those in the Business Roundtable really want to change anything

[13:19] Gemma (gemma.cleanslate): corps that is

[13:19] herman Bergson: What strikes me the most is the meaning of Friedman in the 1962, that the only obligation of a corporation is to maximize profits....

[13:19] Gemma (gemma.cleanslate): i know

[13:19] Particle Physicist Bejiita (bejiita.imako): hmm

[13:19] Gemma (gemma.cleanslate): right

[13:19] Particle Physicist Bejiita (bejiita.imako): and that is clearly the case

[13:20] oola Neruda is offline.

[13:20] Gemma (gemma.cleanslate): and he is till quoted and respected for that

[13:20] herman Bergson: It never is questioned from a moral point of view

[13:20] Gemma (gemma.cleanslate): of course not

[13:20] oola Neruda is online.

[13:20] herman Bergson: neither iI know of any clear argument for this is not a law of nature

[13:21] Particle Physicist Bejiita (bejiita.imako): the products made should be the first priority and all should be on the sharing table, not just the shareholders and bosses

[13:21] herman Bergson: yes...just take this.....

[13:21] CB Axel: He did say there should be some laws to stop unfair advantage.

[13:22] herman Bergson: companies make heavily use of the infrastructure of a society which is paid for by the taxpayers....

[13:22] herman Bergson: education, transportation etc....

[13:22] herman Bergson: yes all profits go to shareholders

[13:22] Particle Physicist Bejiita (bejiita.imako): hmm   :(

[13:22] CB Axel: Libertarians who want to deregulate business don't seem to realize (or maybe don't care) that those regulations were put in place because some greedy bastards did all they could to cheat the system.

[13:22] Particle Physicist Bejiita (bejiita.imako): ant the ones on the floor gets barley enough to survive

[13:23] herman Bergson: who evade taxes in the worst scenario

[13:23] Particle Physicist Bejiita (bejiita.imako): the ones doing thee actual hard work

[13:23] Gemma (gemma.cleanslate): and not payig taxes either yes

[13:23] herman Bergson: isn't that an odd situation?

[13:23] Gemma (gemma.cleanslate): that is the reason for strong unions and sadly......

[13:23] Particle Physicist Bejiita (bejiita.imako): no, tax paradises and 20 lambos in their mansions garage is the norm

[13:24] Particle Physicist Bejiita (bejiita.imako): because it sights STATUS

[13:24] Particle Physicist Bejiita (bejiita.imako): signs

[13:24] CB Axel: I'm a tiny bit sorry that Covid hasn't killed more workers.

[13:25] Gemma (gemma.cleanslate): sarcasm or a quote?

[13:25] CB Axel: In the past when plagues wiped out poor workers the wealthy had to treat those who survived better if they wanted workers.

[13:25] herman Bergson: Yes....some cynical thoughts crossed my mind here....

[13:25] Gemma (gemma.cleanslate): ha ok true

[13:25] CB Axel: Fewer workers mean the bosses have to work harder to recruit and keep them.

[13:26] herman Bergson: Isn't there a more pleasant view....

[13:26] Lente (lentelies.anatine) is offline.

[13:26] Particle Physicist Bejiita (bejiita.imako): mmm

[13:27] CB Axel: I'd hate to think this current plague was for nothing. lol

[13:27] herman Bergson: corparations pay taxes...true....but they evade more...that is the general idea

[13:27] Gemma (gemma.cleanslate) GIGGLES!!

[13:27] Gemma (gemma.cleanslate): ...LOL...

[13:27] Gemma (gemma.cleanslate): tha is sarcasm

[13:27] Gemma (gemma.cleanslate): they do NOT pay many taxes here

[13:27] Gemma (gemma.cleanslate): get away with it

[13:27] Gemma (gemma.cleanslate): loopholes

[13:27] Particle Physicist Bejiita (bejiita.imako): hmm

[13:27] Gemma (gemma.cleanslate): Biden will raise the corporate rate

[13:28] Particle Physicist Bejiita (bejiita.imako): including those bloody tax paradises

[13:28] Gemma (gemma.cleanslate): fingers crossed

[13:28] herman Bergson: That's the fact this could be considered as unethical regarding the society they use to generate their profits

[13:28] CB Axel: Not only do they evade taxes, they use their wealth to buy politicians who will allow them to keep their advantage over the rest of us.

[13:28] Particle Physicist Bejiita (bejiita.imako): :(

[13:28] Gemma (gemma.cleanslate): sigh

[13:28] Particle Physicist Bejiita (bejiita.imako): indeed true

[13:28] Particle Physicist Bejiita (bejiita.imako): politicians are just as corrupt

[13:29] Particle Physicist Bejiita (bejiita.imako): thats why nothing changes

[13:29] oola Neruda: you are right CB

[13:29] Particle Physicist Bejiita (bejiita.imako): they also want MORE MONEY

[13:29] CB Axel: And any more money they have to pay in taxes will be offset by reducing wages/benefits and increasing the price of their goods.

[13:29] Particle Physicist Bejiita (bejiita.imako): even they are paid sky high already

[13:29] herman Bergson: That is just a plain generalization Bejiita.....

[13:29] herman Bergson: not true...

[13:29] CB Axel: That's why I'm for "eat the rich." lol

[13:29] oola Neruda: in the recent hearings, Senator Whitehouse named names of the money people that are paying what i would call bribes.. for certain legislations

[13:30] Particle Physicist Bejiita (bejiita.imako): well there are politicians and politicians but

[13:30] Gemma (gemma.cleanslate): missed that oola

[13:30] oola Neruda: including the choice for the new judge

[13:30] Gemma (gemma.cleanslate): oh interesting issue

[13:30] Particle Physicist Bejiita (bejiita.imako): ah

[13:30] CB Axel: Citizens United will destroy American democracy if it hasn't already.

[13:31] herman Bergson: Here in the EU lobbyists wrote the texts of some legislation....politicians just copy/pasted those

[13:31] Gemma (gemma.cleanslate): I voted yesterday by mail

[13:31] Gemma (gemma.cleanslate): fingers crossed

[13:31] herman Bergson: \o/

[13:31] oola Neruda: it isn't even CU.... these rich people put the money into a fund with a funny name and all of them remain unnamed...

[13:31] CB Axel: I voted over a week ago.

[13:31] oola Neruda: millions

[13:31] Gemma (gemma.cleanslate): ah nice

[13:32] Gemma (gemma.cleanslate): that law should be changed too oola

[13:32] oola Neruda: way to keep them from tracing the money back to "changes that the govt. might make in their favor

[13:32] herman Bergson: At least we can conclude that shareholder capitalism is questions....

[13:33] herman Bergson: Even the Dutch prime minister...he is a diehard liberal said...those huge profits.....those stalling wages for decades.....that is wrong

[13:33] herman Bergson: Everybody was flabbergasted.....

[13:33] .: Beertje :. (beertje.beaumont): yes:)

[13:33] herman Bergson: But I read it as a sign...

[13:34] Particle Physicist Bejiita (bejiita.imako): indeed what to do with so much money other then boasting about how rich u are

[13:34] oola Neruda: nods

[13:34] Gemma (gemma.cleanslate): at least some states here have passed wage increases for minimum wage

[13:34] .: Beertje :. (beertje.beaumont): to be rich isn't about money

[13:34] oola Neruda: I agree Beertje

[13:35] herman Bergson: is power.....As CB said last Tuesday...The US has the best senate money can buy

[13:35] CB Axel: Tell that to a family that has to choose between eating and paying for medicine.

[13:35] oola Neruda: but there are so many who measure it that way

[13:35] Particle Physicist Bejiita (bejiita.imako): and boasters are the worst i know thinking they are better then everyone else

[13:35] oola Neruda: yes

[13:35] Particle Physicist Bejiita (bejiita.imako): like Mr T

[13:35] herman Bergson: No word about Mr. T today please....

[13:35] Particle Physicist Bejiita (bejiita.imako): and yes equality

[13:35] oola Neruda: around here, they are having a huge "used yacht " sale

[13:35] herman Bergson: Then I prefer Mr. Ed more

[13:36] oola Neruda: spelled that wrong

[13:36] Particle Physicist Bejiita (bejiita.imako): equality need to increase and even out

[13:36] CB Axel: Yacht

[13:36] .: Beertje :. (beertje.beaumont): lol Herman

[13:36] CB Axel: Mr. Ed for president!

[13:36] oola Neruda: thank youDB

[13:36] Particle Physicist Bejiita (bejiita.imako): aaaa

[13:37] herman Bergson: I think there is hope for the future.....

[13:37] Particle Physicist Bejiita (bejiita.imako): ah yes

[13:38] Gemma (gemma.cleanslate): free  market sounds nice but is a misnomer i think

[13:38] Particle Physicist Bejiita (bejiita.imako): something WILL change and hopefully soon

[13:38] Particle Physicist Bejiita (bejiita.imako): indeed Gemma

[13:38] herman Bergson: It was a tough lesson but a free market system is not THE solution to create a just society....

[13:38] CB Axel: It's a very expensive market. :)

[13:38] Particle Physicist Bejiita (bejiita.imako): free as in free to runout of control

[13:38] CB Axel: Right, Bejiita.

[13:38] Gemma (gemma.cleanslate) GIGGLES!!

[13:38] Gemma (gemma.cleanslate): ...LOL...

[13:38] Gemma (gemma.cleanslate): yes

[13:38] Particle Physicist Bejiita (bejiita.imako): greed taking over

[13:39] Particle Physicist Bejiita (bejiita.imako): thats how i think of the term

[13:40] herman Bergson: Well...then, to conclude this conversation.....let's hope for the best and where is time there is hope

[13:40] Particle Physicist Bejiita (bejiita.imako): true

[13:40] oola Neruda: we neeeeed hope

[13:40] Particle Physicist Bejiita (bejiita.imako): YAY! (yay!)

[13:40] herman Bergson: The real debate has started...that is for sure...

[13:40] Particle Physicist Bejiita (bejiita.imako):

[13:40] Gemma (gemma.cleanslate): remember people are good :-)

[13:40] herman Bergson: Thank you alll agian....^_^

[13:41] herman Bergson: Class dismissed.....

[13:41] Gemma (gemma.cleanslate): ♥ Thank Youuuuuuuuuu!! ♥

[13:41] .: Beertje :. (beertje.beaumont): Thank you Herman

[13:41] CB Axel: So either people are good is wrong or politicians aren't people.

[13:41] CB Axel: Thank you, Herman.

[13:41] oola Neruda: thank made some really astute observations

[13:41] herman Bergson: Interesting thesis CB :-)

[13:41] Particle Physicist Bejiita (bejiita.imako): some turtles? i got none before as router mapped

[13:41] herman Bergson: Thank you oola:-)

[13:42] Particle Physicist Bejiita (bejiita.imako): thats why i crashed

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