Scaleable, yes...

Post #13,208 by Ric Locke 10/12/01 9:49:24 PM Reply	Scaleable, yes... The scaleability aspect comes, as you state, from the non-controlled nature of capitalism [note small c]. Do you like Pratchett? "I'm sure we can pull together, sir." Lord Vetinari raised his eyebrows. "Oh, I do hope not, I really do hope not. Pulling together is the aim of despotism and tyranny. Free men pull in all kinds of directions." He smiled. "It's the only way to make progress. That, and, of course, moving with the times." (from The Truth) I remain convinced that the two aspects I described are problems. We (here, especially) know that experience and loyalty are valuable, but there's no place on the balance sheet to write down a number for that value. The result is a distortion... and, equally distorting, the stock exchanges don't make any contribution to the actual capital of the companies involved -- it's all third-party action. What to do about all that? I dunno. Regards, Ric
Post #13,216 by Ashton 10/13/01 10:29:59 PM Reply	As to examining our shibboleths Too closely.. A Frank & Ernest cartoon of some years ago: Frank (I guess): sitting at greasy-spoon counter.. Notices a sign over large soup cauldron, DO NOT STIR THE SOUP Asks the cook, "why not?" Cook: "Because you would not like what you would see, sir." :-\ufffd (Stock market - giant me-too insider lottery with mere vestiges of ritual 'valuation') Boycott Walmart..
Post #13,289 by ben_tilly 10/15/01 8:20:47 AM Reply	One question and a comment Owning stock in a company is owning a piece of that company. Why should people's valuation of a company affect that company's bottom line? When we get into the principle of a companies valuation affecting the real value of the company, you get the material behind speculative stock bubbles. If anything, capitalism should in my books be accused of going too far that way (what with the ability of companies to issue stocks and options). The system works best when people are keeping in mind that a stock's value is theoretically your expectation of its future returns. Nothing more, and nothing less. As for failing to value labour, agreed. Companies tend to plan ahead only a few months to a couple of years. The long-term return from treating labour right aren't obvious on that scale. However I submit that labour is, as a whole, better off after capitalism has been around a while than it was before. In fact capitalism is inherently unfair. Some people get more. They get more for semi-random reasons. That may strike our sensibilities the wrong way, but it is the very engine behind the process. The desire for more, and the knowledge that it is possible to get it motivates people to work. Cheers, Ben
Post #13,479 by Ric Locke 10/15/01 11:48:00 PM Reply	Re: One question and a comment "...Why should people's valuation of a company affect that company's bottom line?" Well, of course, in fact it doesn't, except to the extent that the company owns stock in itself -- a remarkable concept. The glitch comes with the definition of "shareholder value". This is by modern definition the goal of a corporation -- to produce value for its shareholders. If the company can manipulate the stock market so as to increase the value of its stock, that brings shareholder value -- and, as you say, creates bubbles and slumps. One abstraction too many. My own modest proposal :-) is to (1) allow corporations to deduct dividends from gross income for tax purposes, and (2) institute a "churning surtax" to make up for the revenue loss from #1. This would in fact be a tax increase, since the recipients of the said dividends would be paying income tax on them, but some sop to the Left-Liberals is called for. The churning surtax would be a stamp tax on exchanges of securities of all types; a very small percentage, multiplied by the maturity of the security, divided by the time held. Common stocks would be considered to have a synthetic maturity of either five or ten years, depending on the age of the corporation. Both times would be calculated in days; thus, if the base percentage was 0.1% of the transaction, the tax on a day trade would be 0.1% x (5 x 360) / 1 = 180% of the transaction amount... direct sale or other transfer of the security by the issuer would be exempt, and all securities held by an individual would be assumed to have reached maturity at the death of the owner. As for employees -- how about capitalizing training? Then depreciating it? A sizeable percentage of a new-hire's salary would be totted up in the capital account, as when you buy a new machine. This would continue, with a decreasing percentage, over say the first ten (?) years of employment. Beginning then, the corporation could depreciate the training. Depreciation, as a decrease in the capital account, counts as income... Hey, lots of the "capital" of many corporations is the ethereal "goodwill". Why not "Employee training" as a capital, depreciable asset? Regards, Ric

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