The reality is that people make lots of money in the stock market by voting against the interests of working people. Working people need things to be cheaper than they are while the stock market works to keep prices of goods and services higher. This is clear in terms of the fact that the stock market is going down because oil prices are going down.It is also true that the stock market approach to setting prices for goods and services works against the interests of working people to receive living wages for the work they do. To treat these two parts of the economy as complementary under these circumstances is wrong. We must recognize that often times rises in stock prices are the result of most people losing out.
People who make money through earnings for work are often hurt by things that make money for people who primarily make money through making investments. If we actually recognize this we will start to treat the two things differently as really at odds with each other rather than as complementary parts of the same basic economy. Which is how we usually talk about it today.
The economy doesn’t have to be organized in a way that works like this. It could and should be set up so that these two different parts of the system works with each other rather than against each other. This would be possible if we had some recognition in our system that corporations have some social responsibility as well as a responsibility to their stockholders. That would be a much more sensible and socially responsible way to organize our economy but it would require investors to recognize that there are other interests at play here than simply making them as much money as possible.
I believe that if we were to adopt this principle generally it would be accepted by most investors as a reasonable approach to operating the economy in everyone’s best interest. There would certainly be some investors who would consider this unreasonable but I think they would be in the minority given that at this point stockholders include lots of the working people that stand to gain on the other end. Even if this were not the case this principal should still be pursued. This would qualify as a huge change to the way our legal system and economy currently function and make corporations accept a new social responsibility that many of them don’t accept now.
There is nothing in the basic nature of capitalism that suggests that corporations could not have some social responsibility for the actions they take and that is all this proposal would require. The real question would be how to make a choice in any actual given situation. That is a really complicated question to try and answer. I think it would have to be decided by the courts with relation to the level of social difficulty that different corporate decisions would cause.
There would be a whole jurisprudence that would have to grow up around this question as well there should be. Even if the courts took a really limited approach to imposing this responsibility on corporations the situation would be much better8il than it is right now. Today there is absolutely no recognized responsibility to act in the best interests of the entire economy in making corporate decisions that affect the economic interests of stockholders.