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It’s odd to me that you see the mutually beneficial transaction there but not in the stock market. I will state this once as simply as I can: stock market inve

by pb7 6y ago

It’s odd to me that you see the mutually beneficial transaction there but not in the stock market. I will state this once as simply as I can: stock market investors are rewarded for funding companies by taking on that risk in hopes that the companies they invest in produce a profit. It is overwhelmingly similar to the process you are describing with your credit union, but in a much more distributed way. > Workers don’t need the shareholders, and they get nothing in return (except lower salaries). There would be no workers if companies didn’t have the capital the needed. So no, the workers very very much need the shareholders. The money has to come from somewhere. No bank is going to bankroll the next Airbnb, Uber, Instacart, DoorDash, etc. Beyond that, the workers aren’t owed a penny more than they agreed to be paid. If public shareholders didn’t exist, the owners would have full ownership which is what happens with small businesses. Nowhere in these circumstances are workers any better off. Profits and losses are not their domain. I’m sorry if I sound like I’m talking down to you. It is just that you are a victim of cognitive dissonance possibly due to your unconscious bias against wealth.

recursive 6y ago
If I buy a stock of a company, how is that funding the company? Only the previous holder of the stock gets the money.
- pb7 6y ago
  At some point, the previous holder of the stock was the company itself. That’s called an IPO. Additionally, companies frequently issue new shares to raise money. Tesla has done this multiple times in the past few years.
  - recursive 6y ago
    Most of the activity (all of it?) on the stock market seems unrelated to IPOs. Is there any particular reason stocks must be transferable?
    - pb7 6y ago
      Yes, it’s an incentive to encourage buying by reducing the commitment.
      - recursive 6y ago
        It does seem to have that effect. It also seems to have other effects. And it seems to be mostly other effects. If funding companies requires all those effects, it seems legitimate to question whether it's a net benefit.
        pb7 6y ago
        I would take you more seriously if you spoke more concretely. What other effects, specifically? I’ll give you one: it distributes wealth by letting the common man invest in highly valuable companies rather than limiting it to just wealthy people profiting from entrepreneurship. I’ll bet you you and people like you wouldn’t be too happy if only the original founders of companies like Apple, Facebook, Google and their descendants owned those companies. Do you know how I know? Because Jeff Bezos owns just 11% of his own company and people still hate him despite that the other near 90% has made other people very wealthy too. Now imagine he owned 100% of it. That’s what you’re advocating for. If you think Jeffy boy would be more generous to his employees if he owned all of it, then you must not know the realities of most family owned businesses.
        recursive 6y ago
        I don't think I'm advocating for anything. I don't know what all the effects of the stock market are, but it seems like it probably has some. It's probably best you don't take me seriously. I don't have any strongly held opinions about any of it. Maybe I'll develop some, but I'm just trying to figure it out for now.
        runarberg 6y ago
        I’m not parent but I’m gonna chime in here and take this threat do yet another direction: You have to ask your self, who are these people that have gotten extremely wealthy from Amazon? How did they contribute to generating that wealth? From where does the wealth come from that they are profiting from? Now some of that wealth goes to hedge funds and workers see some of it in their 401(K) and what not. But if the alternative is that non of these people that invested in Amazon got extremely wealthy from it... They just got their investment’s worth and a little extra (like a proper loan would). And the wealth generated by Amazon would stay within the company, let’s be a little ideological here and imagine that this wealth would actually be used to pay workers what they deserve. Don’t you think the workers would get more from that deal, perhaps they could use that extra money to open up a saving account, perhaps they could pay it in social security. Anyways I really don’t see in what possible world the existence of the stock market can benefit workers. It just does not seem to work out mathematically. To use the Occam’s razor here... If you have to invent epicycles to explain your case, perhaps the simpler explanation is true. This stock market + 401(K) + hedgefuns + etc. seems to me just to be a bunch of epicycles, and money is actually simply being siphoned away from the value generated by the workers into rich folks that use the stock market for that endeavor. I see two possibilities here: a) The stock market is a predatory lending scheme b) The stock market is a pyramid scheme Either way the stock market should crash and burn
runarberg 6y ago
Shareholders and investors aren’t the only means of collecting revenue for a business. Alternatives include: * Setting aside parts of the profit for future investment * Getting a loan from a bank or your local credit union * Community or owner funding Do you honestly think that if it wasn’t for investors businesses would just stop existing? In a world without venture capitalists businesses would need to stand on their own merits, if it is not profitable it will go bankrupt. If it is a popular idea though, a competitor will find a better way of making it profitable, and share that profits with the owners and the workers (and not a shareholder because we don’t need them). Arguably the existence of venture capitalist markets makes stupid unprofitable businesses out-compete better run businesses, simply by merit of being able to persuade investors.
- pb7 6y ago
  > Setting aside parts of the profit for future investment Companies go public without being profitable. Raising money via IPO is one step to becoming profitable. > Getting a loan from a bank or your local credit union No bank is going to loan $100M to a complicated startup with no collateral that needs capital to grow quickly and is unlikely to be able to start repaying for years. This is where VCs come in — they understand complex business models and invest as needed in exchange for equity. > Community This is regular investing. The people in your community are not more important than people living elsewhere. Everyone should have an equal opportunity to invest in promising businesses everywhere. > Owner funding Bootstrapping is already extremely common and accounts for most small businesses of which there are thousands and thousands. It’s not suitable for big businesses that make global impact. You can’t have a bootstrapped Google or Airbnb or Square.
  - runarberg 6y ago
    Now I do think you are just trying to win an argument and not actually debating in good faith. Community funding includes accelerators such as Y-combinator, wealthy philanthropists, and charities. Heck I didn’t mention it but you could crowdsource the money for all I care... Point is, alternatives exists that are less predatory then shareholders and investors. > No bank is going to loan $100M to a complicated startup (Since we are both just trying to win this argument) Perhaps startups that need $100M to get started, and are unable to crowdsource, loan, or community fund that amount simply should exist. Or at the very least, perhaps it should downscale to a more affordable price, earn some profits and scale up as the profits turn in. I’m not gonna cry for a hypothetical startup that failed because they couldn’t raise $100M before they even began the work. > You can’t have a bootstrapped Google or Airbnb or Square. So what? I see people complain about Google and AirBnB all the time on this very forum. These are massive companies that have shown predatory and monopolistic behavior time and time again. Maybe the business world would be better if we didn’t have any tech giants. And instead, smaller tech companies would have to collaborate on big scale projects. Remember that we got the CD by a collaboration.

by pb7 6y ago

recursive 6y ago

If I buy a stock of a company, how is that funding the company? Only the previous holder of the stock gets the money.

pb7 6y ago
At some point, the previous holder of the stock was the company itself. That’s called an IPO. Additionally, companies frequently issue new shares to raise money. Tesla has done this multiple times in the past few years.
- recursive 6y ago
  Most of the activity (all of it?) on the stock market seems unrelated to IPOs. Is there any particular reason stocks must be transferable?
  - pb7 6y ago
    Yes, it’s an incentive to encourage buying by reducing the commitment.
    - recursive 6y ago
      It does seem to have that effect. It also seems to have other effects. And it seems to be mostly other effects. If funding companies requires all those effects, it seems legitimate to question whether it's a net benefit.
      - pb7 6y ago
        I would take you more seriously if you spoke more concretely. What other effects, specifically? I’ll give you one: it distributes wealth by letting the common man invest in highly valuable companies rather than limiting it to just wealthy people profiting from entrepreneurship. I’ll bet you you and people like you wouldn’t be too happy if only the original founders of companies like Apple, Facebook, Google and their descendants owned those companies. Do you know how I know? Because Jeff Bezos owns just 11% of his own company and people still hate him despite that the other near 90% has made other people very wealthy too. Now imagine he owned 100% of it. That’s what you’re advocating for. If you think Jeffy boy would be more generous to his employees if he owned all of it, then you must not know the realities of most family owned businesses.
        recursive 6y ago
        I don't think I'm advocating for anything. I don't know what all the effects of the stock market are, but it seems like it probably has some. It's probably best you don't take me seriously. I don't have any strongly held opinions about any of it. Maybe I'll develop some, but I'm just trying to figure it out for now.
        runarberg 6y ago
        I’m not parent but I’m gonna chime in here and take this threat do yet another direction: You have to ask your self, who are these people that have gotten extremely wealthy from Amazon? How did they contribute to generating that wealth? From where does the wealth come from that they are profiting from? Now some of that wealth goes to hedge funds and workers see some of it in their 401(K) and what not. But if the alternative is that non of these people that invested in Amazon got extremely wealthy from it... They just got their investment’s worth and a little extra (like a proper loan would). And the wealth generated by Amazon would stay within the company, let’s be a little ideological here and imagine that this wealth would actually be used to pay workers what they deserve. Don’t you think the workers would get more from that deal, perhaps they could use that extra money to open up a saving account, perhaps they could pay it in social security. Anyways I really don’t see in what possible world the existence of the stock market can benefit workers. It just does not seem to work out mathematically. To use the Occam’s razor here... If you have to invent epicycles to explain your case, perhaps the simpler explanation is true. This stock market + 401(K) + hedgefuns + etc. seems to me just to be a bunch of epicycles, and money is actually simply being siphoned away from the value generated by the workers into rich folks that use the stock market for that endeavor. I see two possibilities here: a) The stock market is a predatory lending scheme b) The stock market is a pyramid scheme Either way the stock market should crash and burn

runarberg 6y ago

Shareholders and investors aren’t the only means of collecting revenue for a business. Alternatives include: * Setting aside parts of the profit for future investment * Getting a loan from a bank or your local credit union * Community or owner funding Do you honestly think that if it wasn’t for investors businesses would just stop existing? In a world without venture capitalists businesses would need to stand on their own merits, if it is not profitable it will go bankrupt. If it is a popular idea though, a competitor will find a better way of making it profitable, and share that profits with the owners and the workers (and not a shareholder because we don’t need them). Arguably the existence of venture capitalist markets makes stupid unprofitable businesses out-compete better run businesses, simply by merit of being able to persuade investors.

pb7 6y ago
> Setting aside parts of the profit for future investment Companies go public without being profitable. Raising money via IPO is one step to becoming profitable. > Getting a loan from a bank or your local credit union No bank is going to loan $100M to a complicated startup with no collateral that needs capital to grow quickly and is unlikely to be able to start repaying for years. This is where VCs come in — they understand complex business models and invest as needed in exchange for equity. > Community This is regular investing. The people in your community are not more important than people living elsewhere. Everyone should have an equal opportunity to invest in promising businesses everywhere. > Owner funding Bootstrapping is already extremely common and accounts for most small businesses of which there are thousands and thousands. It’s not suitable for big businesses that make global impact. You can’t have a bootstrapped Google or Airbnb or Square.
- runarberg 6y ago
  Now I do think you are just trying to win an argument and not actually debating in good faith. Community funding includes accelerators such as Y-combinator, wealthy philanthropists, and charities. Heck I didn’t mention it but you could crowdsource the money for all I care... Point is, alternatives exists that are less predatory then shareholders and investors. > No bank is going to loan $100M to a complicated startup (Since we are both just trying to win this argument) Perhaps startups that need $100M to get started, and are unable to crowdsource, loan, or community fund that amount simply should exist. Or at the very least, perhaps it should downscale to a more affordable price, earn some profits and scale up as the profits turn in. I’m not gonna cry for a hypothetical startup that failed because they couldn’t raise $100M before they even began the work. > You can’t have a bootstrapped Google or Airbnb or Square. So what? I see people complain about Google and AirBnB all the time on this very forum. These are massive companies that have shown predatory and monopolistic behavior time and time again. Maybe the business world would be better if we didn’t have any tech giants. And instead, smaller tech companies would have to collaborate on big scale projects. Remember that we got the CD by a collaboration.