TL;DR at bottom.
Ok so we all know that the fuckery around things like shorts and stuff are bad. But let’s just forget about all sorts of financial instruments which derive their value from stocks. In other words, let’s forget about “derivatives” such as options, swaps, shorts, etc. Let’s just say that tomorrow all this other shit will be banned. So now we’re back to simple buying and selling of stocks (shares) in companies.
Now, why in the world would a person want to own a stock? There are only two fundamental reasons in my opinion.
- You want to trade in stocks.
- You want to buy a stock and collect dividends.
Let’s tackle these one by one.
- You want to trade in stocks.
Why do you want to do this? I’ll tell you why. You want to buy a stock at a certain price and then sell it later for a higher price, thus making a profit. Sounds good right? How can there be a problem with this? It’s simply buying and selling like people buying Pokemon cards right?
Well here’s the fundamental problem with that: THERE'S ALWAYS A SUCKER AT THE END OF THE CHAIN. What I mean by this is that Person A buys a stock and sells it to Person B at a higher price. Person B bought it so that they could sell it at an even higher price than what they bought it for. So they sell to Person C, who also wants to sell it for a higher price at a later date. Do you see now? THIS CHAIN NEVER ENDS. There is always someone at the end who's holding the bag and hoping for another sucker to come along. What kind of system depends on people hoping for the next sucker in line? Sounds like a Ponzi scheme to me.
It should be pretty clear that this is a bad reason to trade in stocks, from the viewpoint of society. It promotes a 'dog eat dog' right-wing mindset that's all about "getting yours" at the expense of others... REACTIONARY
- You want to buy a stock and collect dividends.
Now you might say that this is more “noble” and “upright” than the shifty person who only wants to buy low and sell high. Perhaps in that sense you’re not a stereotypical middle man, but that doesn’t mean what you’re participating in is somehow better. You see, when you own a stock, in a sense you’re a “part-owner” in that company. The more shares you own, the more “ownership” you have, so to speak. (Obviously this is complicated by the fact that simply owning a share of doesn’t entitle you to make company decisions, as this depends on the type of share and all that BS, but my point remains the same.) Thus as a “part-owner” you are typically entitled to a small portion of the profit of the company you own stocks in. The more stocks you own, the more little bits of profit you receive. These are known as “dividends.” Some people don’t buy stock in order to sell it later: they simply own it because they want to collect dividends (kind of like landlords tbh).
“So what’s wrong with that?”, you may ask. Well, I’ll tell you. How does a company make profit? By squeezing as much productivity as they can out of their workers. By “downsizing” (i.e. firing) their workers. By dumping chemicals into rivers because it’s cheaper than properly disposing of them. By using child labor overseas for pennies on the dollar. By influencing politicians to intervene in foreign countries by funding fascist death squads that slaughter innocent people. By extracting wealth not only from your own country, but from other countries. By lobbying to classify you as an “independent contractor” or find other ways to suppress your wages. And on and on… By the way, under our current economic/political/legal system, companies only have one primary goal: to maximize profits for their shareholders. They do this at the expense of all else! So say goodbye to "ethical" companies.
So that nice little “dividend” that you get because you own a share is basically blood money. You may not be that sleazy wall street bro (who is basically a glorified middle man), but you are still COMPLICIT IN EXPLOITATION. Even if it’s just your retirement 401k, it’s being upheld and bolstered by exploitation. And when your retirement is threatened, you're gonna side with some "unsavory" elements in order to protect it... REACTIONARY
Summary
So even if all derivatives like shorts were banned, simple trading of stocks is also bad.
TL;DR People only really buy/sell stocks for two reasons, both of which are bad:
- You buy in order to sell high later ==> Ponzi scheme.
- You buy to collect dividends ==> exploitation
Every cheap commodity you buy, wherein you are receiving it for a lower price than it would otherwise be worth, due to supression of wages and labor rights, is supporting the company that supresses those things, and thus you are a reactionary.
Are you buying it in order to sell it later at a higher price? Because that's what I was talking about.
It doesn't matter. You are taking advantage of opressed workers in order to receive the good at a lower price.
The exploitation is there whether you resell something or not. Palm oil isn't less exploitative because you didn't resell your jar of Nutella.
Yeah and a slave is exploiting other slaves by eating food that his master gives him (food that his master earned through exploitation).
Again, not what I was talking about.
increase. I would prefer that extra profits would just be given back to employees as a cash bonus. Stock prices aren’t physically linked to a company’s business success/failure so giving an employee a lottery ticket instead of the cash to buy a lottery ticket is kinda
i don’t really side with your sentiments OP but this thread has brought out actual discuusion of the stock market from a Marxist lens
That’s exactly the reason I was calling for this kind of comm.
Yeah and a slave is exploiting other slaves by eating food that his master gives him (food that his master earned through exploitation).
Again, not what I was talking about.
Yes, it is what you are talking about. By your own logic, you are engaging in inherently reactionary activity by supporting the continued oppression of workers. By your own logic, union workers who buy securities to fund their pensions are engaging in inherently reactionary activity.
I mean that's a reasonable interpretation. You heard of Settlers?
I will make sure to tell my friend that the securities his tribe owns makes them all reactionary.
I hope he's not using his wife's boyfriend's credit card to buy those securities.
Are we trying to say No True Leftist and tell people they’re Bad?
This one.
I get what you're saying, but I think it needs to be made clear specifically why stock trading itself (as opposed to derivatives like shorts) is not good.
Are these conversations supposed to be normative? Are we trying to point out unobvious structures within a system? Are we trying to say No True Leftist and tell people they’re Bad?
I'd say that I'm trying to point out something that's unobvious, as it seems to me that a lot of people are only focusing on the short situation, i.e. "I can't believe they shorted more than the available shares! I can't believe Robin Hood is manipulating the market!" Even before I personally got a mini-crash course in how shorts work, I still had these gripes (that I outlined in the post) about the stock market. My point is that even without all this fuckery, it's still exploitative. And I think it deserves a more in-depth explanation than simply saying "it's capitalist and therefore it's also bad."
Going to move to a remove outpost in the Alps so I can have absolutely no interaction with capitalism.
Your first argument is essentially a condemnation of exchange entirely.
- You buy in order to sell high later ==> Ponzi scheme.
I would argue that "gambling" is the more correct name of what you were describing. Its like having a ticket to a slot machine. Price goes up... do I try to sell... or do I try to wait and see if it goes higher?
Ponzi would be me paying what I owed to somebody to buy stocks with money that you gave me to buy you stocks.
socialism means feeling self righteous while telling people how righteous you are. Marx day traded, go to bed.
Marx also plausibly fathered a child with his maid. So should I use my power to bang my underling at work? What a smooth-brained take....
Well. I think you don't understand what stocks are. Stocks are basically a a way company can raise money without the requirements of repayment or interest that would normal occur if the company had to take out a loan. Every stock starts as an initial public offering, this is where, in the simplest terms, the company sell shares of ownership to the general public in hope to raise capital. When you trade a stock after a IPO, you are just trading a investment that someone else made. However, stocks don't necessary entitle you to the assets of the company. I find it kinda funny, but all early stocks paid dividends. Most companies don't do this anymore.
If you had a cooperative company, this would be a great way to return profits to the workers. Because of inflation and company growth, you would expect any stock from a health company increase.
When you trade a stock after a IPO, you are just trading a investment that someone else made.
Yes, the investment that someone else made was sold to you at a higher price than what they bought for. This just proves my point.
You buy in order to sell to someone else. They do the same. The chain never ends.
You clear haven't studied any finance. Stocks often taken out of the market by the company through stock by backs. And yes, that true about any valuable material -somebody buys then sells at a higher price.
Stocks often taken out of the market by the company through stock by backs.
You mean when companies artificially prop up their stock prices and give extra extra big bonuses to executives and board members?
And yes, that true about any valuable material -somebody buys then sells at a higher price.
Ah, yes that's what I did with those fries I got today, I immediately sold them for a profit instead of eating them in order to satisfy my hunger. Because that's what happens to "aNy VaLuAbLe MaTeRiAl"
Are we rehashing Thomas Friedman here?
You are right. Companies do conduct by backs to raise the share prices. This is part of the companies corporate obligation to do what's best for shareholders. I don't think this philosophy is very good.
However, it's not like any trading of goods doesn't lead to price increases. I mean look at gold. There is a very small practical use for gold that does not drive the desire to own it. However, gold is very valuable. This value does not come from the labor need to extract gold, but the desire to have it. Historically, gold prices increase.
Do you mean Milton Friedman lol?
It doesn't have to be at a higher price though. I could buy somebody out of their shares after the share price dropped because they need the cash more than the gamble that prices will rise later.
So that person who you bought it from is the sucker. That pretty much proves my point.
Its gambling, so... :shrug:
People also can trade stocks directly for other stocks, as well as use a drop in stock price as a tax deduction.
Its gambling, so… :shrug:
Which is why, sidenote, gambling has been pretty much prohibited by every major religion. Metaphysics, ontology, faith, and theology aside, they kinda had a good point.
You're gonna have to explain this one cuz I've never heard of this critique before.
..It promotes a ‘dog eat dog’ right-wing mindset that’s all about “getting yours” at the expense of others… REACTIONARY
So this feels pretty paternalistic to me, not trusting that somebody engaging in risky behavior can't be warned of the risk and then allowed to suffer the consequences. I thought the whole point behind your OP was that engaging in stock trading promotes a transaction were one participant benefits at the expense of another. A binary thing where there are two positions, win or lose that can only result in a winner and a looser. Then to refer to the person in the transaction who looses as a "sucker" feels weird.
Just saying maybe re frame it so that it doesn't look like you're attacking the person in the situation that I thought you were trying to defend
If you had a cooperative company, this would be a great way to return profits to the workers. Because of inflation and company growth, you would expect any stock from a health company increase.
I would prefer that extra profits would just be given back to employees as a cash bonus. Stock prices aren't physically linked to a company's business success/failure so giving an employee a lottery ticket instead of the cash to buy a lottery ticket is kinda sus.
I mean, can’t you argue that shares of a company pretty much grant you a portion of the ownership?
I would prefer that extra profits would just be given back to employees as a cash bonus
Isn’t that what dividends are?
Well.. lets go back a bit. I've never dealt with a workers coop so I don't know how they do. But wouldn't giving some employees more "ownership" through shares than other employees defeat the purpose of being a worker coop? If some employees votes count more than others, that might go against the spirit of a coop. Just looks like recreating the system of a non cooperative workplace where some employees effectively don't have a say in the workplace.
... Isn’t that what dividends are?
I guess that could be a way to look at dividends. But dividends are taxed differently than regular income and whatever other rules exist around stocks and dividends would apply. So it would be like a cash bonus with extra steps and possibly extra rules/taxes. Just seems like too many extra steps to get earned profits for labor done back into the pockets of the workers.
But wouldn’t giving some employees more “ownership” through shares than other employees defeat the purpose of being a worker coop?
What about simply granting equal shares?
So it would be like a cash bonus with extra steps and possibly extra rules/taxes. Just seems like too many extra steps to get earned profits for labor done back into the pockets of the workers.
Yes, but maybe under a slightly different system the dynamic of taxes would change.
Just seems like too many extra steps to get earned profits for labor done back into the pockets of the workers.
But there's still the aspect of ownership. You own the means of production in a sense, you're profiting off your own labor (?)
I'm still thinking the easiest answer is that a worker gets one share, one vote. Extra profits are returned to employees as a cash bonus.
Taking profits at the end of the business year, figuring out a price to assign to the coop's stock, turning the cash into a stock, giving the stock to the current employees.... and then what?
An employee getting extra shares but not being able to sell them to anybody because they can't be sold to people who don't work in the coop and couldn't be sold to another employee without causing a voting imbalance (assuming that a share = a vote in decisions) means that the extra profits of the coop never get into the hands of the employees. It would just sit in a safe or bank somewhere until the coop spent it on something.
Not gonna lie this entire exchange between you two is like arguing over whether Harry Potter could really have cast that spell or not. IT'S ALL MADE UP BULLSHIT.
Oh Im sorry Ill go spend my money on some ethical consumption then. Should i order my groceries from Walmart or Amazon?
Are you talking about buying them in order to sell them later? Because that's what I'm talking about.
What if Im buying them just to throw the soup cans at billionaires and cops?
You're not a middle man who's just trying to fleece the next sucker then, so do you I guess.
This is a really long way to explain you don’t understand the stock market
Ah yes I don't understand made up money games.
I didn't read Harry Potter either so I can't explain the difference between hufflepuffs and all that magic shit either. "yOu cLeArLy dOn't uNdErStAnD ThE InTrIcAcIeS Of tHiS FaNtAsY BoOk sErIeS ThAt i tAkE WaAaY ToO SeRiOuSlY"
