WRL Homepage • WRL Programs • WRL Literature • WRL Actions • WRL Employment • About WRL
|
Homepages: | |
|
A
Bear Market for Activists By Larry Dansinger
Simply put, there is nothing “socially responsible” about investing in stocks—or in any other investment to use your money to make more money (profit). But stocks are the least responsible. The stock market, no matter how progressive the company or how “green” the financial advisors, reinforces the most harmful aspects of the for-profit capitalist economy and is the worst place for anyone concerned about economic justice and social change to put their hard-earned money. Investing in the stock market exacerbates an economic system that (1) transfers money from poor people to rich people; (2) promotes large-scale, monopoly-sized businesses while destroying small, locally-based economic enterprises; (3) encourages people to gamble with their economic security; and (4) makes economic alternatives such as cooperatives, community-owned systems, or not-for-profit enterprises less likely to emerge because the economy is so profit-driven and dependent on large infusions of capital. Here’s how: 1. Stock investing transfers money from poor people to rich people.
Not only have lower-income people not benefitted much from the stock market, they have also paid most of the profits that stockholders receive. They subsidize these corporations in several ways: as employees by receiving lower wages and/or fewer benefits; as consumers by paying higher prices for goods they purchase or buying sweatshop goods that give the company higher profits; and as taxpayers by paying higher taxes that offset corporate welfare benefits, which the businesses use to accumulate more capital or keep as profits. Employees also bear the brunt of lost wages and jobs because of corporate cutbacks or moves to other states or countries in the name of cost-cutting and higher stock prices. Finally, corporations oppose unions more ferociously when they are protecting not only the company’s operations, but stockholders’ dividends and profits. 2. Stock investing promotes large-scale, monopoly-size businesses,
which in turn put small, locally based economic enterprises out of business.
Any corporation that can issue publicly traded stock has enough capital and economic clout to take advantage of various kinds of corporate welfare (tax abatements, government-provided facilities and other give-aways) even as it rakes in huge profits. These benefits gives it further advantages in outdistancing its competitors. Small businesses have suffered most from this trend to bigness; “get big or get out” is the prevailing theory for business health. There is no level playing field between “big-box” chains like Wal-Mart and small businesses. Small retail and wholesale companies can rarely compete with giant manufacturers or retail marts. The buying power of large corporations, thanks to their access to capital and economies of scale, means they can undersell small competitors with ease. As the U.S. economy becomes more and more dominated by multinationals, the opportunities to create small businesses and economic alternatives is reduced because powerful corporations resist any threat to their domination by insuring tax and other public policies favorable to big business. 3. Stock investing encourages people to gamble with their economic
security. The stock market is the middle- or upper-income person’s version of the lottery. Investing feeds the notion that it’s all right to make money without doing any real work. The income/asset division in this country is growing wider because wealthier people have money to gamble on stocks. They often get a lot more money than those who work harder but get paid much less and can’t afford to take risks. The current debate about letting Social Security recipients use part of their benefits to buy stocks encourages the idea that the stock market is safe and that we can have complete faith in large corporations. If Social Security money is invested, the U.S. government will have to sustain corporate welfare even more than it already is doing to make sure none of the big companies fail, since the whole economy will have become tied to the success or failure of those corporations and their stock prices. 4. Stock investing makes economic alternatives such as cooperatives,
community-owned systems, or not-for-profit enterprises even less likely
to emerge because the economy is so profit-driven and dependent on large
infusions of capital. Economic alternatives such as worker cooperatives or community-owned businesses have become even more marginalized because potential financing from local investors has been drained away by stock investments. The self- capitalization system used to finance economic alternatives in the past is generally considered out-of-date and ineffective in today’s economy. What to
Do, What to Do? Wrong! Should we be on part of a tide that is lifting all yachts while the smaller boats are swamped and the people in them are swimming for their lives? Should progressives and our organizations, such as the War Resisters League and its members, claim a privilege and entitlement not open to most lower-income people (many of whom are people of color)? Should we, in other words, participate in a system that is countering the social and economic justice we are working toward? Should we really invest in anything, even if it’s called “socially responsible,” if it makes our economic system worse, not better? Shouldn’t we be getting out of that system entirely and building an economy that is more cooperative, community-owned, and not profit-based? Real social responsibility means transferring money from corporate to not-for-profit and social change efforts, to local and human-scale enterprises that will use the money for social good. I believe those of us who want to create and participate in a nonviolent economic system can do so by selling any stocks we or our organizations currently hold and not participating in any way in the stock market (except to immediately sell any stocks given to us in the future). We can put our extra money (if we have any) into worker- or consumer-owned cooperatives or nonprofit peace and justice groups. If we use financial institutions, we can deposit money into locally oriented or community development credit unions. There are options for people who want to divest themselves of corporate stocks but may not be ready to give up investing for a profit. Some nonprofit lending institutions actually do accomplish socially responsible goals while paying investors interest at rates of up to four percent (occasionally higher). They include:
Finally, we can talk to others about our view of investing for profit, especially in the stock market, and tell them how we can use our money for “people, not profits.” We can urge them to sell any stocks they hold. When others know that there are better choices than supposedly “socially responsible” stock investing and that no stock purchase is socially responsible, they may use their money for more social change goals as well. Most of us have heard “It takes money to make money” and “Money is power.” Investments, particularly in the stock market, allow those with money to make more and to gain economic and political power and advantage. Rather than being part of a harmful system to gain small financial benefits, we can reject the stock market and put our money into a parallel system that would provide economic benefits for those with the least wealth and those working for economic justice. Larry Dansinger, from Monroe, ME, works with WRL’s Maine local, INVERT/Resources for Organizing and Social Change. |
WRL Homepage • WRL Programs • WRL Literature • WRL Actions • WRL Employment • About WRL
he
stock market has careened up and down like the proverbial roller coaster
in recent months, and some investors have fallen off and been hurt by
its swings. But even if the market bounces back, it will still be a deadly
ride for people who want their money to be used in socially responsible
ways.