A teachable moment recently occurred on The Middle Class Forum. I received a comment faulting how I related entitlements to stockholders. I approved and replied to that comment, but I’m going to cut and paste that reply here for three reasons: 1) my original reply was “off the cuff” and there was sloppiness in my wording, I’ve remedied that here; 2) the commenter ironically demonstrates the very point I wish to make about entitlements; and 3) this is reflective of a societal problem at large.
Compare two kids, one who has been heavily indulged by his parents, the other not. Which one is likely to take any kind of indulgence for granted? Which one is more prone to a tantrum, particularly when his/her indulgence is being threatened? Substitute government for parent in this equation and consider the following exchange that occurred.
“Being so indulged and possessed has led to greed, feeling entitled to stuff for which we did not labor (hello stockholders).” (My original post that spurred the comment)
A question for you Sir: How on earth do you equate a return on an investment with an entitlement. What is this, Moronomics 101?
An entitlement in the common vernacular is a guaranteed benefit provided by government. You present a few examples below. Stocks also fall into this category because the business corporation model exists only by the grace of government. That’s been true since the first stock was issued for the Dutch East Indies Company. Without government licensing and protections, “investment” either takes the form of bartering against the future or loansharking. A proprietorship can and has functioned without government, a business corporation cannot and never has. That’s not only entitlement, but indulgence.
The fact is when an investor collects a dividend or reaps a capital gain from a stock investment, it is a voluntary arrangement that hurts nobody.
Well, except that the “voluntary” arrangement cannot happen without government providing infrastructure (transportation, limited liabililty, licensing, due process as an “individual,” currency, legal definitions and protections of contracts) that all commands an advantage to anonymous corporations concentrating resources over diffuse proprietorships. This advantage not only enables corporations to turn profits they might not be able to if they actually had to pay for the extra costs of transportation subsidization, management hierarchies, and additional marketing involved in expanded markets, the government commanded advantage also enables the corporation to out compete proprietorships for consumers and laborers. So, the bottom line is proprietorships are hurt by the command of the economy government provides for corporations, an indulgence that entitles a stockholder to get a piece of government-suckled action.
Contrast this to actual entitlements – Social Security, Medicare, Medicaid, Food Stamps, Public Education – all of which are enterprises that subside upon pelf collected by force, which if conducted privately under the same set of conditions would constitute a Federal crime known as racketeering.
Those are indeed entitlements, never said they weren’t. There is a private corollary to stock investments called loansharking.
Maybe next time you could sneer (parenthetically) “hello Social Security welfare bums!”
Interpreting “(hello, stockholders)” as a sneer, versus a wake-up call, is how a person who feels threatened would overreact. In any case, there is no need to “sneer” at “welfare bums,” they understand what they have is an entitlement. The people who receive the most from government enabled economic structures are the ones who try to selectively apply the meaning of entitlements so that they can benefit from government commanded advantages and pretend they are “self-made” or “libertarian” or involved in “voluntary” arrangements that have no consequences for external parties.
Perhaps you could argue that publically traded corporations “exploit” the people that work for them, depriving them the full measure of pay that they have merited in sacrifice to “unproductive” ownership.
Yes, I could, except a natural owner (without government) is a proprietor (like Henry Ford at the time Model Ts took off) and they are generally productive. Investors are “owners” without the liability and some other natural burdens of proprietors, thanks to their government sugardaddy.
But in contrast to the extortion practiced to endow public entitlements, at least there is a remedy: they can go work for a mutual or a “non-profit”, open their own business,
Um, except those opening their own business have faced tougher bankruptcy laws over the past decade while large corporations get bail outs, subsidies and all the other aforementioned advantages commanded by government. But, in all fairness, some of the profits stockholders could receive get diverted to the lobbying infrastructure that creates this climate.
or – here’s a genius idea – buy some of the stock in the company that they work for (many corporations offer preferred shares to their employees, did you know that?).
Median family income has stagnated for forty years, thanks in part to being replaced by speculative compensation packages (health care, pensions) that at the same time 1) binds the employee towards continued employment for the same company, 2) lowers real time wages and 3) makes savings impossible (of note, people have much greater liberty with savings than with compensation packages). If the wage earner got the same real value from compensation packages as from real wages those packages would not exist, as someone down the line would not be making enough profit. And you think that speculative compensation packages should replace real wages further through shares? Yes, that is genius indeed … for the financial sector.
You know, this sort of sophomoric, pinko claptrap, this equivocating of yours, can only be either the genus of low intelligence or of a willful intention to mislead the incompetent, the ignorant, and the intellectually lazy – a blatant attempt at misinformation.
Name calling and shooting the messenger are what people rely on who are short on substance, or real information. Name calling is also indicative behavior of being indulged.
As highly educated as you present yourself to be, we can only conclude that it is the latter, misinformation, which is something you ironically claim to be crusading against. You, Sir, are a purveyor of misinformation. Hello, Mr. Kettle, meet Mr. Pot.
You have done nothing in your comment to establish what I peddle about entitlement is misinformation. You have to undermine the validity or reliability of my definition of entitlement, rather than simply share your displeasure or add your own qualifiers. Let me give you some tips.
Prove that transportation infrastructure provided by government does not command an advantage to international/national commerce over local/regional commerce.
Prove that removing limited liability from shareholders has no impact on investments.
Prove that if there were no contracts or government licensing corporations could function as well as proprietors.
Prove that extending due process of law to the “individual” corporation, as legally defined by government, does not automatically command an advantage to this limited liability entity over the “individual” known as person (or proprietor).
Now if you’ll excuse us, we have to check on our FCOJ and Pork Bellies futures contracts. Big trading day today in FCOJ; this weather has been a Godsend.
Very Truly Yours:
Mortimer & Randolph
Go right ahead. You are, after all, entitled by government to do so.
PS Your lack of empirical approach (not bothering with the real meaning of words) and inflamatory style reminds me of someone who equated himself with the Illuminatti. Any relationship?
______________
There is virtually no chance that the commenter ever sees the irony in his protest, just as there is little chance someone overly indulged by parents can be dissuaded from a tantrum. That is a problem our society faces at large. Let’s face it, the United States has the most indulged citizenry on the planet. As an indulged citizenry we are hard to convince otherwise, particularly those most indulged, i.e., the wealthiest. As an indulged citizenry we are prone to temper tantrums, particularly by those most connected to corporations and wealth.
Not all indulgences are bad. Parents throw their kids lifelines even as they get older. We could have a fruitful public discourse on what lifelines from government should be. Yet until we realize that corporate and public welfare are indebted to the same source our public discourse will often resemble temper tantrums with corporations turning the most blue in the face.
Tags: Economic Misinformation, Free Market Merit, Middle Class Economics
“An entitlement in the common vernacular is a guaranteed benefit provided by government. You present a few examples below. Stocks also fall into this category because the business corporation model exists only by the grace of government. That’s been true since the first stock was issued for the Dutch East Indies Company. Without government licensing and protections, “investment” either takes the form of bartering against the future or loansharking. A proprietorship can and has functioned without government, a business corporation cannot and never has. That’s not only entitlement, but indulgence.”
Ah, yes, the old VOC. Paid an 18% dividend for two centuries, something like that. Not around anymore; what happened to them?
But anyway, are we missing something here? Are you kidding? (LOLWUT?) The equating of a guaranteed entitlement, which must be paid to the entitlee no matter what is simply not the same as an investment return. Ever tried to make an investment? The collective return on the top 500 U.S. corporations over the last ten years has been FLAT. Did you know that?
Another point: You appear to complain that the supposed government sponsored corporate business model is protective of owner liability. Yeah, well so what? Without that who in the hell in their right mind would make a private investment. Even a proprietorship in its modern incarnation is afforded all the liability protection that a publically owned business corporation gets (well, you could opt not to take advantage of this protection, but then you would be pretty damn stupid). Without liability protection only the government could direct capital, but our guess is that this is the system that you would like to see.
Regards,
Randolph and Mortimer.
P.S. What is this Illuminati that you speak of. There is no such thing as the Illuminati, just like there is no such thing as the “Powell Cabal”.
P.P.S. Um…you seem to have a little too much time on your hands. So tell us, are you like a trust fund baby or something, perhaps suffering from the pains of guilt?
“Without liability protection only the government could direct capital, but our guess is that this is the system that you would like to see.”
I jump to that “guess” of yours first to comment on how far off base you are in terms of understanding my position, and that the likely cause is you are so used to being indulged by our economic system you can’t imagine any alternative without indulgence. Your unlikely comprehension of my position almost a certainty, let me proceed in order of the points raised.
1. There is no guarantee that people will be compensated what they put into Social Security either. Perhaps “guarantee” was not a good choice of word for describing either of our accusations of entitlement, though my main emphasis was on the idea of being indulged, which you have done nothing to prove does not happen between government and corporations. And that was the highlight of your counterpoints.
2. There do exist “pretty damn stupid” proprietors out there. You insinuate by this that it is “pretty damn stupid” not to be indulged by government when you can be. I would not expect a corporate apologist to feel any other way, nor anyone else who has been habitually indulged. There is, for that matter, bartering and other market exchanges that go on daily that do not even have the umbrella of a proprietorship. I know these kind of market exchanges go even beyond “pretty damn stupid” for one who likes government to protect their ass, so let’s not speak of it further. There are, for that matter, behaviors that could be described as investments between merchants in rural settings that are done completely outside the suckling of government but, once again, that really could not be understood by indulged corporate apologists as being anything other than insane.
3. To make an analogy (I know how much you like analogies and metaphors) your position aligns with the early federalists (latter day Republicans) that pushed for strong, centralized government for the sake of corporations and commerce. The opposition at the time were states rights agrarians, which I have some sympathies towards. Technically, they became latter day Democrats, and perhaps that is the cause of why you are so clueless about what I stand for. Yet I find Democrats and Republicans, free market libertarians and liberals, now more alike than different. I’m for decentralization and federation: decentralization of targeting and solving problems in the context of community, including anything that might be considered an entitlement, and federation that coalesces those solutions that seem to work for everybody.
4. Am I aware that such a decentralized approach to economics, politics, etc. means less wealth, power and influence for our country? Absolutely. It also means less of certain types of progress (though the most important progress has always been rooted outside of corporations). It also means less paternalism, less wealth disparity and more liberty to pull yourself up only by what you earn, concepts that seem to be alien to you. We have, on the whole, trended towards paternalism since the early nineteenth century, when the Supreme Court began its long process of usurping state authority, so perhaps folks like you are to be forgiven if you think it suddenly occurred with the New Deal, or have a rather skewed idea of democracy that equates it with paternalism. It creates a convenient tautology, doesn’t it. Paternal democracy indulges by nature, which folks like you can then point at the “democracy” of the masses instead of the “paternal” governance as the ultimate cause.
5. I am now a writer and a musician so I do, indeed, have plenty of time on my hands for the pursuit of writing. Since I have no desire for wealth I can indulge myself in terms of wasted time on certain types of writing. I know my disregard for wealth is something else you just don’t get, but it is at the heart of why I am for being independent and you are for being indulged. I’ve decided with my new format to allow anonymous comments obviously, but there is still a limit as to how much time I will waste on someone who has yet to show any comprehension of where I am coming from as an advocate of decentralization. Here’s another tip for you. You are on more solid ground trying to undermine my position as “primitive.” Keep trying to win the liberty/independence/entitlement/indulgence/anti-government argument and you will continue to look foolish … and indulged.