I know an even better way to ensure mass participation in the profits of companies- democratic ownership of the companies by their employees. There must be a name for a system like that.
I think a great place to start is to focus like a laser on repealing and replacing the Citizens United ruling, as soon as we possibly and permanently can. It'll take courage to put the genie back in the bottle, but we must try. Corporations are not people, plain and simple.
It would take a lot more than merely repealing Citizens United (though that would be good). Unfortunately corporate personhood is deeply ingrained in our legal system going back to the Supreme Court cases in the 19th century
It does feel really weird (as a person who owns stock/ETFs/funds) to live in the current doom scape reality and see our net worth hit new highs basically monthly.
It ought to be clear to everyone but members of the rentier class that the latest set of enclosures of public places and processes has been a major engine driving the rise of inequality in capitalist society. And it seems clear to me that allowing private ownership of critical infrastructure (and i hold a rather broad definition of “critical”) should not be allowed.
If we use Charlie Stross’ view of corporations as slow AIs it looks like most if not all of them are busy turning us into something like paper clips.
Totally agree with this, though in order for Joe Schmoes to not have to care so much about the stock market, we need the kind of society where you don't have to make and save so much money to live a dignified life. Right now, the stock market is the only vehicle we have to reliably grow wealth over the long haul (at least historically speaking, that is). As an individual just trying to, as HN says, not have to eat dog food when I'm old, it's hard to jump off the roof before the safety net is laid out.
As a personal finance issue it is absolutely wise to have a retirement investment account but I see that as a necessity for living in the US today rather than as a public policy goal.
Tremendous piece. It also gets at another sinister dynamic of broad based stock ownership rather than tax/spend....in order to have a successful tax/spend regime in place you need to have a shared understanding of the "public good". This is a virtuous cycle in which high taxes=big pot of money=people spend a lot of time thinking about how to determine public good and allocate funds.
Conversely, a stock ownership regime is a tacit admission that there is no possibility of coming to shared understanding of "public good" and as such the best possible outcome is each of us individually making decisions, and hoping that our individual economic whims somehow translates into shared common good. Ofc this is better than a handful of billionaires choosing for us, but is still a deeply cynical view of human nature that says we are unable to collaborate, so why bother trying, let's just cross our fingers and hope that "market forces" will be determinative of collective preferences. Surely this will not work in the long run, probably not even in the medium run, and in the mean time it ossifies our society's collective action muscles in the short run.
In Sweden, the government pension is funded by a roughly 17% withholding on wages. Social Security in the US is around 13% (half paid by employer) and funds about 40% of a salary (not sure I believe this but that’s what is said). In Sweden, the government pension replaces about 60% of a salary at retirement. Lesson for US: We need to up SS contributions, payouts, and remove the salary caps for high earners so there’s proper, fair funding.
On top of that is a corporate pension, because a good chunk (not sure exact percentaes) of the private sector is unionized. The withholding is around 3% to an employee’s wages (the corporation puts more in themselves I think). This is invested in Swedish and international stonks.
On top of that is the ability of Swedes to invest personally. However, since the pension system is so robust, only 50% of Swedes have any private investments at all, because ultimately they aren’t even needed because the pension salary suffices. The combination of multiple pensions give Swedes a comfortable retirement, that they don’t need to supplement. Very few choose to (<50%).
There is a needs based gov pension for anyone (stay at home moms… dads…) who didn’t work during their career, too.
That means the majority of Swedish stocks are owned by pensions (both corporate and government). The ownership by individuals is very small, compared to US. This is the markers of a healthy social democracy, imo. When you don’t even need the populace to own stocks individually, except if you’re into that sort of thing. In US, if you dont invest in index funds personally you can’t pay your bills in retirement. That’s the privatization failure — individually are privately responsible for covering their ass in retirement. 401ks (deferred contributions) suck compared to defined benefits (pensions), since no one is taught how to properly cover their ass by investing at Vanguard. Not the government, not your employer, not even Vanguard NPCs unless you seek them out. You’re entirely on your own!
The pensions invest in the Swedish corporations listed on the stock exchange there, plus international markets. This funds their growth and the payout of the pensions to retirees. Yes, corporate earnings are on the worker’s back, but that’s why we’re missing for our society - widespread unionization with corporate pensions collectively bargained, with the obligation regulated by the government.
There are also laws that workers must have minimum 40% of the company board seats. Nothing like that exists here.
So the ticket seems to be widespread unionization, a more robust social security - taking out 17% instead of 13%, and wide spread corporate pensions that helps replace salaries in retirement. Have that and you create a social democracy where the need to own “your little index funds” (“so you don’t have to eat dogfood in retirement,” as HamNo says) is entirely optional!
Social democracies are happier than uber-capitalist countries. How do we get there, though?
Bernie Sanders has proposed a Social Security Expansion Act and a Pension for All Act. I would love to see either changes in my lifetime.
IANAS either, but I lived and worked in Stockholm for about two years. Aside from the seven-month winters, I found it very pleasant, mainly because Sweden is much more functional for most of its residents than the USA.
For one minor example, as an immigrant, even a temporary one, I had access, free of charge, to as many courses in Swedish as I cared to take. So, jag talar (bara lite) svenska!
One of the sharp differences I observed is that while Swedes I knew grumbled a bit about how high their taxes were, there was a general sense that the "welfare state" belonged to them, middle-class Swedes. It wasn't just a "safety net" for poor people, as most Americans seem to think of (what's left of) the American "welfare state".
And yes, I was a member of a union. I was a guest researcher at the Swedish Institute of Computer Science. For such a "highbrow" job to be unionized is very unusual in the USA but normal in Sweden.
By the way, for most of my stay there, I sublet an apartment from an old lady who spent winters in the Canary Islands, returning to Sweden in the summer. Her daughter, with whom I dealt, told me her mother was enjoying a comfortable retirement on her Swedish national pension.
All good points. There's a very similar problem at work in the housing market. We need cheaper housing, but no one that owns a house wants the value of *their* house to go down. (Or can afford for it to, given that many people's individual wealth is only in their home.) It's a hell of a catch-22 that leads to NIMBYism and opposition to policy that could reduce housing costs.
I often wonder what it would be like to have the representatives in all the country's legislative bodies--or even the majority of them--actually work for the benefit of the people living in their counties, states, country. It has not yet happened in my small section of the United States, and I am afraid it never will. Meanwhile the stock market continues to rise.
Overwhelmingly, they work for the rich, not us. Indeed, many of them *are* the rich, and by no means just Republicans. For example, speaking of stocks, as Jason Koebler noted on the occasion of Nancy Pelosi's retirement from congress, the stock markets have been very, very good to Ms. Pelosi:
"Through wise taxation, regulation focused on the public good, and strong labor rights to empower unions, you get all of the benefits that the ownership society wants to produce without corporate decimation of our democracy and without the need to have centibillionaires in the world."
Good article. You went kind of easy on them though. I mean, I watched DELL and a couple others when they had those massive drops and then gains relative to the early tariff talks, I saw big investors making 10,000% in one day. Buying puts and calls! Huge amounts of volume as in yes they knew what was happening and profited insanely off of that knowledge.... And then there are people like Rourke capital who buy up a bunch of restaurants, bleed them dry, put them into a new sub company (inspire brands) and then take them public.... They put people on the boards who know what the stocks are going to do so they can short them when the time comes. Blah blah blah... It is so bad. We got to fix this quick!
I know an even better way to ensure mass participation in the profits of companies- democratic ownership of the companies by their employees. There must be a name for a system like that.
A worker cooperative is the name I know for this.
But what if employees only own a controlling stake of stock and the minority remainder are publicly traded?
If that happened I would shit my pants.
We should come up w a cool name for it, like ownershipism or something, that will get everyone on board and bypass their scaredycat circuits.
This is something that Richard Wolff talks about. https://en.wikipedia.org/wiki/Mondragon_Corporation Of course they are like any other business they don't always work out. https://institute.coop/about-worker-co-ops/examples-worker-cooperatives
I’ve been thinking about the stock market a lot recently and this was excellent. There could be a lot more here
Good stuff, thanks.
I think a great place to start is to focus like a laser on repealing and replacing the Citizens United ruling, as soon as we possibly and permanently can. It'll take courage to put the genie back in the bottle, but we must try. Corporations are not people, plain and simple.
It would take a lot more than merely repealing Citizens United (though that would be good). Unfortunately corporate personhood is deeply ingrained in our legal system going back to the Supreme Court cases in the 19th century
It does feel really weird (as a person who owns stock/ETFs/funds) to live in the current doom scape reality and see our net worth hit new highs basically monthly.
It ought to be clear to everyone but members of the rentier class that the latest set of enclosures of public places and processes has been a major engine driving the rise of inequality in capitalist society. And it seems clear to me that allowing private ownership of critical infrastructure (and i hold a rather broad definition of “critical”) should not be allowed.
If we use Charlie Stross’ view of corporations as slow AIs it looks like most if not all of them are busy turning us into something like paper clips.
Totally agree with this, though in order for Joe Schmoes to not have to care so much about the stock market, we need the kind of society where you don't have to make and save so much money to live a dignified life. Right now, the stock market is the only vehicle we have to reliably grow wealth over the long haul (at least historically speaking, that is). As an individual just trying to, as HN says, not have to eat dog food when I'm old, it's hard to jump off the roof before the safety net is laid out.
As a personal finance issue it is absolutely wise to have a retirement investment account but I see that as a necessity for living in the US today rather than as a public policy goal.
Tremendous piece. It also gets at another sinister dynamic of broad based stock ownership rather than tax/spend....in order to have a successful tax/spend regime in place you need to have a shared understanding of the "public good". This is a virtuous cycle in which high taxes=big pot of money=people spend a lot of time thinking about how to determine public good and allocate funds.
Conversely, a stock ownership regime is a tacit admission that there is no possibility of coming to shared understanding of "public good" and as such the best possible outcome is each of us individually making decisions, and hoping that our individual economic whims somehow translates into shared common good. Ofc this is better than a handful of billionaires choosing for us, but is still a deeply cynical view of human nature that says we are unable to collaborate, so why bother trying, let's just cross our fingers and hope that "market forces" will be determinative of collective preferences. Surely this will not work in the long run, probably not even in the medium run, and in the mean time it ossifies our society's collective action muscles in the short run.
IANAS (I am not a Swede) but played an Ikea pension manager recently in a horror TTRPG (https://www.reddit.com/r/rpg/comments/fxr7ah/dread_i_adaptedwrote_and_ran_an_adventure_called/), so I spent the evening before researching the pension system in social democracies, and this is what I found:
In Sweden, the government pension is funded by a roughly 17% withholding on wages. Social Security in the US is around 13% (half paid by employer) and funds about 40% of a salary (not sure I believe this but that’s what is said). In Sweden, the government pension replaces about 60% of a salary at retirement. Lesson for US: We need to up SS contributions, payouts, and remove the salary caps for high earners so there’s proper, fair funding.
On top of that is a corporate pension, because a good chunk (not sure exact percentaes) of the private sector is unionized. The withholding is around 3% to an employee’s wages (the corporation puts more in themselves I think). This is invested in Swedish and international stonks.
On top of that is the ability of Swedes to invest personally. However, since the pension system is so robust, only 50% of Swedes have any private investments at all, because ultimately they aren’t even needed because the pension salary suffices. The combination of multiple pensions give Swedes a comfortable retirement, that they don’t need to supplement. Very few choose to (<50%).
There is a needs based gov pension for anyone (stay at home moms… dads…) who didn’t work during their career, too.
That means the majority of Swedish stocks are owned by pensions (both corporate and government). The ownership by individuals is very small, compared to US. This is the markers of a healthy social democracy, imo. When you don’t even need the populace to own stocks individually, except if you’re into that sort of thing. In US, if you dont invest in index funds personally you can’t pay your bills in retirement. That’s the privatization failure — individually are privately responsible for covering their ass in retirement. 401ks (deferred contributions) suck compared to defined benefits (pensions), since no one is taught how to properly cover their ass by investing at Vanguard. Not the government, not your employer, not even Vanguard NPCs unless you seek them out. You’re entirely on your own!
The pensions invest in the Swedish corporations listed on the stock exchange there, plus international markets. This funds their growth and the payout of the pensions to retirees. Yes, corporate earnings are on the worker’s back, but that’s why we’re missing for our society - widespread unionization with corporate pensions collectively bargained, with the obligation regulated by the government.
There are also laws that workers must have minimum 40% of the company board seats. Nothing like that exists here.
So the ticket seems to be widespread unionization, a more robust social security - taking out 17% instead of 13%, and wide spread corporate pensions that helps replace salaries in retirement. Have that and you create a social democracy where the need to own “your little index funds” (“so you don’t have to eat dogfood in retirement,” as HamNo says) is entirely optional!
Social democracies are happier than uber-capitalist countries. How do we get there, though?
Bernie Sanders has proposed a Social Security Expansion Act and a Pension for All Act. I would love to see either changes in my lifetime.
IANAS either, but I lived and worked in Stockholm for about two years. Aside from the seven-month winters, I found it very pleasant, mainly because Sweden is much more functional for most of its residents than the USA.
For one minor example, as an immigrant, even a temporary one, I had access, free of charge, to as many courses in Swedish as I cared to take. So, jag talar (bara lite) svenska!
One of the sharp differences I observed is that while Swedes I knew grumbled a bit about how high their taxes were, there was a general sense that the "welfare state" belonged to them, middle-class Swedes. It wasn't just a "safety net" for poor people, as most Americans seem to think of (what's left of) the American "welfare state".
And yes, I was a member of a union. I was a guest researcher at the Swedish Institute of Computer Science. For such a "highbrow" job to be unionized is very unusual in the USA but normal in Sweden.
By the way, for most of my stay there, I sublet an apartment from an old lady who spent winters in the Canary Islands, returning to Sweden in the summer. Her daughter, with whom I dealt, told me her mother was enjoying a comfortable retirement on her Swedish national pension.
All good points. There's a very similar problem at work in the housing market. We need cheaper housing, but no one that owns a house wants the value of *their* house to go down. (Or can afford for it to, given that many people's individual wealth is only in their home.) It's a hell of a catch-22 that leads to NIMBYism and opposition to policy that could reduce housing costs.
I often wonder what it would be like to have the representatives in all the country's legislative bodies--or even the majority of them--actually work for the benefit of the people living in their counties, states, country. It has not yet happened in my small section of the United States, and I am afraid it never will. Meanwhile the stock market continues to rise.
Overwhelmingly, they work for the rich, not us. Indeed, many of them *are* the rich, and by no means just Republicans. For example, speaking of stocks, as Jason Koebler noted on the occasion of Nancy Pelosi's retirement from congress, the stock markets have been very, very good to Ms. Pelosi:
https://www.404media.co/nancy-pelosi-one-of-the-greatest-wall-street-investors-of-all-time-announces-retirement/
Hell, ya!
"Through wise taxation, regulation focused on the public good, and strong labor rights to empower unions, you get all of the benefits that the ownership society wants to produce without corporate decimation of our democracy and without the need to have centibillionaires in the world."
Voters are stupid. They have failed to vote for their best interests for decades.
God bullshit. Gun nonsense. Abortion. Plus other diversions.
The tribal two party system.
Propaganda.
Of course we should tax more.
We should do a lot more than that.
But the few control the herd.
The only change is when the US has a " let them eat cake" moment. We were or are almost there.
Sadly life is going to really suck for everyone when it gets that bad.
Especially the rich too dumb to leave the country.
It's a meme stock market.
Thank you!
YES YES YES YES Finally someone outlines it in a way that I can share to others
Good article. You went kind of easy on them though. I mean, I watched DELL and a couple others when they had those massive drops and then gains relative to the early tariff talks, I saw big investors making 10,000% in one day. Buying puts and calls! Huge amounts of volume as in yes they knew what was happening and profited insanely off of that knowledge.... And then there are people like Rourke capital who buy up a bunch of restaurants, bleed them dry, put them into a new sub company (inspire brands) and then take them public.... They put people on the boards who know what the stocks are going to do so they can short them when the time comes. Blah blah blah... It is so bad. We got to fix this quick!
Let's leftists collaborate on some option trading!