4 ms·

What about putting shareholders in jail?

anonym29 2y ago
A great solution to disincentivize all investment into capital markets - bankrupting thousands of companies, resulting in hundreds of thousands if not millions of layoffs and widespread economic devastation not seen in the U.S. since the great depression. Should we also start imprisoning everyone who voted for Obama because Obama's DoD conducted drone strikes against weddings, churches, and other civilian facilities and gatherings resulting in more civilian deaths than Bush's? Shareholders are no more responsible for the misdeeds of management than voters are for the misdeeds of politicians, after all. Your proposal goes against the core tenants of justice, liability, and property rights that have guided the civilization responsible for every part of your life that you cherish - from the device and connection you're posting with to the appliances that you cannot live without, to the economic systems that have lifted more human beings out of poverty than any other economic system ever conceived. What's the argument in favor of your proposal that outweighs these cons? P.S. - I upvoted your comment because as much as I vehemently disagree with your proposal, I believe we should all have the decency to discuss ideas we disagree with rather than attempt to censor them.
- tivert 2y ago
  > Shareholders are no more responsible for the misdeeds of management than voters are for the misdeeds of politicians, after all. That's BS. Big shareholders can get seats on the board of directors and have influence over management decision-making. Jail time for shareholders is probably going too far in most circumstances, but forfeiture of shares is pretty reasonable.
  - anonym29 2y ago
    >but forfeiture of shares is pretty reasonable. From who, and to who? From only those big shareholders with seats on the board, from the "little guy", or from both? What happens to the forfeited shares in your proposal? Are we redistributing them? Are they getting nationalized? Mandatory buybacks? Destruction of those shares, increasing the voting power of the other shares?
  - nradov 2y ago
    Seizing shares without paying compensation at the market rate would be flatly unconstitutional. There's really no question about that, it's a settled legal issue.
    - tivert 2y ago
      > Seizing shares without paying compensation at the market rate would be flatly unconstitutional. There's really no question about that, it's a settled legal issue. I don't think so. The scenario isn't an eminent domain "give it up 'cause we want that property" it's "you did wrong [because it did wrong and you own it], and this is your punishment." It's basically a fine, and fines aren't unconstitutional. Furthermore, in this specific case, Boeing has plead guilty to a felony, which makes the existence of a legal wrong pretty crystal clear.
      - nradov 2y ago
        You may not "think" so, but you would be completely wrong because you're ignorant about the basics of US law. Boeing as a corporation and their shareholders are separate legal entities.
        ryandrake 2y ago
        I know this is crazy talk, but with enough political will, US law can actually be changed.
        nradov 2y ago
        Yes, that's literally crazy talk. Boeing shareholders haven't broken any law currently on the books. Regardless of what Boeing (the corporation) and its employees might have done there is zero political will to change the US Constitution Article I, Section 9, Clause 3, or the 5th Amendment. Not going to happen in our lifetimes. https://constitution.congress.gov/browse/essay/artI-S9-C3-3-3/ALDE_00013193/ https://constitution.congress.gov/browse/essay/artI-S9-C3-3-... https://constitution.congress.gov/browse/essay/amdt5-9-1/ALDE_00013280/ https://constitution.congress.gov/browse/essay/amdt5-9-1/ALD... The level is aggressive ignorance that we see in HN comments about legal issues is both hilarious and depressing. Most HN users are educated US citizens and yet somehow they're still ignorant about the basics. I guess that's an indictment of our educational system?
- bigiain 2y ago
  > A great solution to disincentivize all investment into capital markets While I agree with your argument here, that opening line really raises questions. Do we want "capital markets" at all if they're structured in a way that incentivizes risking innocent people's lives to reward the market participants with increased profits, without any equivalently existential consequences when that risk goes bad and hundreds of people die as the next Boeing airliner ploughs a hole in the ground? Something's deeply wrong with how things work now, and capitalism is looking awfully like the root cause.
  - anonym29 2y ago
    >Something's deeply wrong with how things work now, and capitalism is looking awfully like the root cause. I don't refute that there are big problems with how things are currently being run, but what evidence exists suggesting that an alternative economic system is the solution? Please correct me if I'm wrong, but China has far more industrial accidents and avoidable deaths than the US does, no? We also didn't have the same extent of the kinds of problems being discussed here in the past, while the US was still a capitalist country then too, right? That makes me ponder whether a change in the implementation of capitalism is to be blamed more so than capitalism itself - if not a combination of that and other factors unrelated to the economic system. It's not difficult to draw a line back to when we shifted away from a more "stakeholder-y" capitalism towards shareholder value maximization as a motif, but that begs the question: why were we more unified and stakeholder oriented back then, but not so much anymore, if the rationale behind shareholder value maximization was as true then as it is now?
    - AstralStorm 2y ago
      "But China" doesn't say as much against non-capitalist systems as you think it does. It still runs capitalism, just more state controlled. It's the mirror side of the corporate-controlled government of the US. Shareholder value maximization is not what changed, but zero regulation happened, and securitization so that nobody knows where to really go with pitchfork and torches. Probably somewhere overseas to seize random tax haven assets.
  - 2y ago
- mcculley 2y ago
  I appreciate you treating the question in the way it was intended: A thought experiment. Our system does not treat seriously the bad behavior of corporations. It is a way for shareholders to get only the upside and not suffer the consequences. Long ago, I divested from a mutual fund when I realized that it made me an indirect owner of Philip Morris. As shareholders, we can make choices that harm people and yet we risk no consequences beyond losing our investment. If it is a serious argument that we should jail more CEOs, then all who profit from criminal corporate behavior should be punished.
  - anonym29 2y ago
    I applaud your willingness to put people over profits, but there is still a part of your (conditional) statement that makes me quite uncomfortable: >then all who profit from criminal corporate behavior should be punished. American, European, and British citizens profit from exploitation of the global south, exploitation that often includes violence. Should all American, European, and British citizens be punished simply for being beneficiaries of activity they don't necessarily endorse or support? What about shareholders who didn't make a choice to purchase shares of the companies in question, like recipients of pensions where the pension fund purchased shares in pursuit of producing a return for the workers they have promised to support financially?
    - mcculley 2y ago
      The first part of your question seems like a different question to me. We have fundamental problems within our own legal framework that allow us to capture only the upside, which is the issue I am bringing up. You are expanding this to other jurisdictions. I think this is a fair question, but a different subject. I am not convinced that we should jail shareholders. I am also not convinced that legal entities designed to limit liability should exist. As for the second part of your question about those who inadvertently and ignorantly own shares in criminal enterprises, I think it is a good question and I do not have an answer. Maybe pension funds should be responsible for their investments.
      - 2y ago

A great solution to disincentivize all investment into capital markets - bankrupting thousands of companies, resulting in hundreds of thousands if not millions of layoffs and widespread economic devastation not seen in the U.S. since the great depression. Should we also start imprisoning everyone who voted for Obama because Obama's DoD conducted drone strikes against weddings, churches, and other civilian facilities and gatherings resulting in more civilian deaths than Bush's? Shareholders are no more responsible for the misdeeds of management than voters are for the misdeeds of politicians, after all. Your proposal goes against the core tenants of justice, liability, and property rights that have guided the civilization responsible for every part of your life that you cherish - from the device and connection you're posting with to the appliances that you cannot live without, to the economic systems that have lifted more human beings out of poverty than any other economic system ever conceived. What's the argument in favor of your proposal that outweighs these cons? P.S. - I upvoted your comment because as much as I vehemently disagree with your proposal, I believe we should all have the decency to discuss ideas we disagree with rather than attempt to censor them.

tivert 2y ago
> Shareholders are no more responsible for the misdeeds of management than voters are for the misdeeds of politicians, after all. That's BS. Big shareholders can get seats on the board of directors and have influence over management decision-making. Jail time for shareholders is probably going too far in most circumstances, but forfeiture of shares is pretty reasonable.
- anonym29 2y ago
  >but forfeiture of shares is pretty reasonable. From who, and to who? From only those big shareholders with seats on the board, from the "little guy", or from both? What happens to the forfeited shares in your proposal? Are we redistributing them? Are they getting nationalized? Mandatory buybacks? Destruction of those shares, increasing the voting power of the other shares?
- nradov 2y ago
  Seizing shares without paying compensation at the market rate would be flatly unconstitutional. There's really no question about that, it's a settled legal issue.
  - tivert 2y ago
    > Seizing shares without paying compensation at the market rate would be flatly unconstitutional. There's really no question about that, it's a settled legal issue. I don't think so. The scenario isn't an eminent domain "give it up 'cause we want that property" it's "you did wrong [because it did wrong and you own it], and this is your punishment." It's basically a fine, and fines aren't unconstitutional. Furthermore, in this specific case, Boeing has plead guilty to a felony, which makes the existence of a legal wrong pretty crystal clear.
    - nradov 2y ago
      You may not "think" so, but you would be completely wrong because you're ignorant about the basics of US law. Boeing as a corporation and their shareholders are separate legal entities.
      - ryandrake 2y ago
        I know this is crazy talk, but with enough political will, US law can actually be changed.
        nradov 2y ago
        Yes, that's literally crazy talk. Boeing shareholders haven't broken any law currently on the books. Regardless of what Boeing (the corporation) and its employees might have done there is zero political will to change the US Constitution Article I, Section 9, Clause 3, or the 5th Amendment. Not going to happen in our lifetimes. https://constitution.congress.gov/browse/essay/artI-S9-C3-3-3/ALDE_00013193/ https://constitution.congress.gov/browse/essay/artI-S9-C3-3-... https://constitution.congress.gov/browse/essay/amdt5-9-1/ALDE_00013280/ https://constitution.congress.gov/browse/essay/amdt5-9-1/ALD... The level is aggressive ignorance that we see in HN comments about legal issues is both hilarious and depressing. Most HN users are educated US citizens and yet somehow they're still ignorant about the basics. I guess that's an indictment of our educational system?
bigiain 2y ago
> A great solution to disincentivize all investment into capital markets While I agree with your argument here, that opening line really raises questions. Do we want "capital markets" at all if they're structured in a way that incentivizes risking innocent people's lives to reward the market participants with increased profits, without any equivalently existential consequences when that risk goes bad and hundreds of people die as the next Boeing airliner ploughs a hole in the ground? Something's deeply wrong with how things work now, and capitalism is looking awfully like the root cause.
- anonym29 2y ago
  >Something's deeply wrong with how things work now, and capitalism is looking awfully like the root cause. I don't refute that there are big problems with how things are currently being run, but what evidence exists suggesting that an alternative economic system is the solution? Please correct me if I'm wrong, but China has far more industrial accidents and avoidable deaths than the US does, no? We also didn't have the same extent of the kinds of problems being discussed here in the past, while the US was still a capitalist country then too, right? That makes me ponder whether a change in the implementation of capitalism is to be blamed more so than capitalism itself - if not a combination of that and other factors unrelated to the economic system. It's not difficult to draw a line back to when we shifted away from a more "stakeholder-y" capitalism towards shareholder value maximization as a motif, but that begs the question: why were we more unified and stakeholder oriented back then, but not so much anymore, if the rationale behind shareholder value maximization was as true then as it is now?
  - AstralStorm 2y ago
    "But China" doesn't say as much against non-capitalist systems as you think it does. It still runs capitalism, just more state controlled. It's the mirror side of the corporate-controlled government of the US. Shareholder value maximization is not what changed, but zero regulation happened, and securitization so that nobody knows where to really go with pitchfork and torches. Probably somewhere overseas to seize random tax haven assets.
- 2y ago
mcculley 2y ago
I appreciate you treating the question in the way it was intended: A thought experiment. Our system does not treat seriously the bad behavior of corporations. It is a way for shareholders to get only the upside and not suffer the consequences. Long ago, I divested from a mutual fund when I realized that it made me an indirect owner of Philip Morris. As shareholders, we can make choices that harm people and yet we risk no consequences beyond losing our investment. If it is a serious argument that we should jail more CEOs, then all who profit from criminal corporate behavior should be punished.
- anonym29 2y ago
  I applaud your willingness to put people over profits, but there is still a part of your (conditional) statement that makes me quite uncomfortable: >then all who profit from criminal corporate behavior should be punished. American, European, and British citizens profit from exploitation of the global south, exploitation that often includes violence. Should all American, European, and British citizens be punished simply for being beneficiaries of activity they don't necessarily endorse or support? What about shareholders who didn't make a choice to purchase shares of the companies in question, like recipients of pensions where the pension fund purchased shares in pursuit of producing a return for the workers they have promised to support financially?
  - mcculley 2y ago
    The first part of your question seems like a different question to me. We have fundamental problems within our own legal framework that allow us to capture only the upside, which is the issue I am bringing up. You are expanding this to other jurisdictions. I think this is a fair question, but a different subject. I am not convinced that we should jail shareholders. I am also not convinced that legal entities designed to limit liability should exist. As for the second part of your question about those who inadvertently and ignorantly own shares in criminal enterprises, I think it is a good question and I do not have an answer. Maybe pension funds should be responsible for their investments.
    - 2y ago