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The Ethics of Share Ownership

 
 
invisible_al
10:36 / 17.04.03
Ok I've noticed that economics as a whole doesn't get talked about much on Barbelith so here's a thread to test the water.

I was given some shares a few years ago as part of a bequest with stern instruction not to sell them all and go on a spending spree. Foolishly I didn't and winced when the market collapsed wiping off half their value.

But I've been thinking of just getting rid of them as the whole concept of share ownership seems to be at odds with being a progressive liberal type that I claim to be, especially since the company in question is Stagecoach. A company that by all accounts treats it's staff badly, is anti-union and engages in predatory behaviour to the detriment of city transport networks everywhere. I own part of the company, so am I complict in it's actions despite being able to do very little to change company policy? Should I be idly profiting from the work of other people?

Just a few questions to get things going...
 
 
Persephone
13:33 / 17.04.03
You know, I guess it's like vegetarianism. One of the main arguments against vegetarianism is that it's only a partial gesture, therefore it's invalid. So perhaps owning stocks is like the eating red meat of capitalism. You could give that up, but maybe you'd still be eating chicken and fish or wearing leather shoes. I would think that very few of us would willingly disrupt our lives to the extent it would take to totally extricate ourselves from capitalism, if that's even at all possible. So I think that the most moral position is to always know where you're making your stand and to never think that you're not standing on someone's head, that's the sorrow of the world.
 
 
grant
14:43 / 17.04.03
But isn't progressive liberalism based, in part, on ideas of communal ownership?

And what's a share if not communal ownership?
 
 
Perfect Tommy
21:29 / 17.04.03
...though, the ethics of owning shares in the not-progressively-liberal company you mention could shore be an ethical ickiness.
 
 
Char Aina
02:56 / 18.04.03

A company that by all accounts treats it's staff badly, is anti-union and engages in predatory behaviour to the detriment of city transport networks everywhere.



is that the same stagecoah owned by brian souter? he became the popular face of homophobia in scotland over 'the clause', or 'the section' depending which side of the border you are on.

he ploughed his personal fortune(gained from his bus company) into campaigning against the repeal of some of the most disgusting legislation to be drafted.

i dont know if that sways your decision at all, but i dont even ride in his buses for fear of in any way condoning his view or being complicit in his actions.
 
 
Punji Steak
09:13 / 18.04.03
Also, owning shares in a company entitles you you to attend its AGMs, where you can bring up any grievances you have with the way the company is run. Food for thought?
 
 
pointless and uncalled for
10:57 / 18.04.03
Alternatively you could consider changing them for shares in a progressively liberal fashion and thus accepting the nature of the bequest without the ties of support to ideals that you don't hold to.

For instance my mother is also progressively liberal and has shares in a company that sets up and operates wind power generated electricity farms.

On the subject of share ownership itself, as an abstract, in relation to socialism and liberalism, I don't there is any great clash of ideologies. Short of living in a state of utopia, I can't see how either philosophy can conceivable object to engaging in contingencies to ensure that you are provided for in the future.

Sure you could have a bank account or bank operated pension scheme, but that is fairly much the same as owning shares in a company with less risk. And what exactly is the bank doing with your money while they look after it for you? It may treat it's employees well but the fact that it could well be bank rolling loans to dictatorial companies or financing arms deals far outweighs that.
 
 
ONLY NICE THINGS
19:32 / 21.04.03
Potus makes a very good point - the principle underpinning pretty much all investments based on interest is that the money you give to the institution is invested and the profits or the repayments on enterprises and loans provides the interest you receive. so, on one level, Persephone is right - an awareness that this is how capitalism works, or the preparedness to remove oneself from the process, seem to be the two immediately credible responses of the "responsible" shareholder. In those terms Stagecoach is a problem because, indeed, of the clause-keeping antics of its (to the best of my knowledge) major shareholder, whose financial means are vouchafed by the performance of Stagecoach, which is in turn made partially viable by the capitalisation provided by its shareholders, and so on.

Now, part ownerhsip of the company might give a voice and a means to protest about these actions from the inside, but the system is weighted so that poor people have to go to massivley greater effort to organise a sizeable degree of voting power in a share-driven economy, whereas a single rich person or cabal of a fairly small number of rich people can more easily corner 51% of the votes. See also "B" shares and various other means to capitalise companies without having to listen to investors.

So, how about the "ethical" route? There are ISAs out there that only invest in "ethical" projects, although what that means is open to massively broad interpretation; some merely avoid arms dealing, others seek out grass-roots projects in the developing world. The idea is that the term "ethical" means that your money will not be used to support (ahem) bad things. But is this an achievable goal, or are we looking at a sop to allow people to feel better about capitalising on the disparity between their own incomes and the capital available to their culture and that of another? Is ethical business/ ethical capitalism a sop, and if it is is it still useful?
 
 
Leap
17:53 / 22.04.03
If the 'unethical' businesses were to change their practices so as to be 'ethical', or cease to trade, what would happen to the economy? Given its current apparent fragility I would guess that it would collapse - unethical practices being generally responsible for keeping the economy afloat due to their high profit efficiency. If you are are not prepared for that to happen then even investing in ethically dodgy companies can be 'justified'.......and then of course if you were prepared to accept that as the cost, why invest in the first place.....?
 
 
Perfect Tommy
21:22 / 22.04.03
'The idea is that the term "ethical" means that your money will not be used to support (ahem) bad things. But is this an achievable goal, or are we looking at a sop to allow people to feel better about capitalising on the disparity between their own incomes and the capital available to their culture and that of another?'--Haus

("sop" is the shortest word I've ever had to look up)

If the bad things that are to be avoided include mistreatment of workers--that is, we're not discussing a renewable energy company that uses slave labor to make its organic tofu windmills--then ethical investing isn't a sop. "I'm loaded," the ethical investor says, "and I choose to invest in companies which provide non-exploitative jobs to the non-loaded."

But then Leap says, '...unethical practices [are] generally responsible for keeping the economy afloat due to their high profit efficiency.' Thing is, is that an inherent problem? Southwest Airlines keeps its employees pretty happy, is mostly unionized, has never laid off employees, and yet hasn't posted a loss since 1991 (though the last quarter was a pretty *slim* profit what with the state of the industry).

I'm inclined to think that if enough investors declare "avoiding bad things" to be significant in deciding where their money goes, then ethical practices would be an investment draw, and would therefore have real advantages over ScrewTheWhalesCorp. (As for whether that would ever happen, though...)
 
 
Persephone
21:56 / 22.04.03
I'm inclined to think that if enough investors declare "avoiding bad things" to be significant in deciding where their money goes...

It's not just that, though. It has to be enough consumers similarly declaring to avoid bad things, right?

Although actually I just stuck my head in here to say that in my earlier post I was working off the assumption that capitalism is essentially bad, and I thought that assumption ought to be looked at. Particularly as it seems that Tommy isn't working from that assumption.

So I'm trying to work out in my head what capitalism essentially is, and what's wrong with that. And also what is the thing that is not capitalism. Would it be possible to talk about these in lowercase, as if they were new terms just being born? What's at the *heart* of capitalism-- self-interest and personal accumulation? What's at the heart of the other thing, call it "socialism" --altruism and social accumulation? Is it correct to say about both of these systems that they are working perfectly when they are self-regulating? But in practice, both of these systems have historically required external regulations of various kinds?
 
 
Loomis
10:53 / 23.04.03
Apologies if I've misread you Persephone, but what you've said sounds like a cop-out to me. There's no such thing as a "partial gesture". Or, more to the point, there's no such thing as a "complete gesture". The very fact that we're stuck living within a capitalist system dictates that since we can't get outside it (and if you're honest, would you really want to?), we should act to reduce harm where we can, rather than the opposite which you seem to suggest. It's not all or nothing. Everything you do has implications, and these implications, while they cannot be controlled by you, can at least be directed as far as possible to reduce harm.

At the very least, being vegetarian is not killing x number of animals a year, just as investing in a company listed in the "ethical" prospectus means not being involved in x number of unethical things. The fact that you still have your savings in a bank which invests in unethical things, or the fact that there are Stagecoach buses full of meat-eating unethical investors does not mean that it is worthless to reduce harm wherever you can. I contribute lots of harm with my actions, but I also do the odd good thing, and my lack of perfection does not nullify my good actions.

Again, it's not an either/or situation. There's only a danger of this kind of thing being a sop if you pat yourself on the back for the good you've done and then go back to your day job of microwaving babies. It doesn't matter whether these so-called "ethical" investments are the most wonderfully Right On ideas in the world. An improvement is still worth making, even if it cannot reach an illusory totality. The fact that, for example, the women's movement has not achieved 100% success does not negate the many successes it has enjoyed.

While I don't expect the world (or myself - I'm certainly no knight in shining share portfolio) to turn ethical overnight, if there are easy ways to identify certain business practices (surely there must be some specific info on which activities are allowed and which aren't?) of certain companies and tick a box on your investment portfolio thingy which sends your money to approved companies, then surely that's a tiny little bit of improvement in the world. Just like buying shampoo with a cruelty free logo. You don't need to wait until you have a guarantee that everyone on your block is going to commit to buying that shampoo at the same time you do. All gestures are partial, as all aspects of life are partial. In my view that affirms rather than negates the value of small ethical actions.
 
 
Persephone
11:20 / 23.04.03
Well I do always yammer on about words always containing their opposites, but in this case I did mean exactly what you said!
 
  
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