Why The Stock Market Must Be Banned!

Before I proceed with my reasoning on this, let me first explain that I do understand how thoroughly entrenched in the fabric of the worldwide economy stock exchanges are. I am not suggesting we just close the doors and wash our hands of them overnight. This is a goal that would need to be accomplished via an approximately decade long process that could be discussed at a later time. For now a brief outline of why this must be done as part of any return to an even remotely rational economy.

The stock market, especially as it is practiced today serves as a severe distorting influence on a true free-market system. It does this by largely removing the appraisal of a company's worth and relative health from the work which the company actually performs and focusing it entirely on bottom lines no matter how artificially fattened they may be.

You may say that a company's health is and should be based on its profitability. And I will grant you that a company should be able to cover the costs of production including all wages and miscellaneous overhead while turning some additional profit to be invested in future growth/innovation or financially rewarding those employees who contribute to the accomplish of the company's primary function. This would be a profitable company.

Where the stock market distorts the operation of companies is that it creates an army of creditors who care only for profitability regardless of the impact to the company's long-term viability. The typical owner of GM stock does not care if GM creates a quality vehicle with good fuel efficiency, an afforable price point and a long term strategy for marketplace relevance long into the future.

They only care that their shares, which they bought in a relative vacuum isolated from what should be the primary function of GM (the making of cars), continue to escalate in value from year to year, or (in the age of the daytrader) hour to hour. Hence the profit margin fattening SUV is crammed down the throat of America while R&D dollars are routed away from more forward looking projects in the interest of keeping the "stockholders" happy.

Publicly traded companies tremble in fear of a massive sell-out. High profile failures can kill public perception of a company and result in massive bloodletting throughout management. Innovation is quashed. Risk is shunned. The gears of progress grind to a halt in the interest of pleasing people who know nothing of the original purpose of the company.

Consider too, the effect on the average American. Nearly everyone's retirement account is now tied in to the stock market. When companies slash payroll, outsource manufacturing and do everything else in their power to screw the American consumer, that same consumer sees a moderate bump in the value of their 401(k) or Pension fund. They get slapped around in the real world, but feel "empowered" by the paltry crumbs thrown through their measly stake in the supposedly glamourous world of the Stock Market.

This is how people act and vote against their own best interests.

This is also key to the increasingly imaginary nature of money. Stock values are driven as much by public perception of worth as they are actual results. Steve Jobs gets a cold and Apple stocks plummet in spite of the fact that Steve Jobs' health does not have an immediate impact on Apple's manufacturing of quality gadgets.

Once people are able to perceive the rise and fall of companies in terms of little numbers on a CNBC ticker, they can stop thinking about production, business practices, work and company missions. They can start thinking of worth and value as things that just happen as if by magic. They stop asking questions about how money is "made" and worry only about how they can get their hands on more.

They will accept whatever imaginary financial vehicles the book-cookers can come up with and they never worry about how real those numbers are.

You want to know how the Financial Crisis could be allowed to happen? Look at our most fundamental, basic invesment arena and you will see that the world has been conditioned against rationality. Capitalism has been replaced with a reverence for an abstract notion of Money that reads less like economics and more like religion.

There's a reason that courses in Economics have been steadily replaced by those in "Economic Theory". It's because we have allowed the entire economy to become theoretical and imaginary. And we can blame the stock market for removing the worth of car companies, computer companies and appliance companies from their abilities to create cars, computers and appliances.

It has to come to an end if we are ever to have a real economy again.

Excellent post. See, you are not just a chaos agent. You clearly shine light on kinks, and thereby, help bring about ultimate stability and order. Others should read. Yoda says, "A thinker you are."

Edit: There is one problem, but we can get our way out of it. Much of the wealth in the west is based on this illusory bologna. Remove the smoke and mirrors, and little is left. We are, however, excellent at dangling carrots, so maybe we should just come out, be honest, and say in a diplomatic way, most people have been monkeys, and as such, needed to be directed towards singularity. Or maybe we should just let history illustrate such. It saves face. But I am far more optimistic towards the future than most. I think we are on the cusp of something wonderful, but we must play the necessary roles. Godspeed.

[edit on 14-12-2009 by orwellianunenlightenment]

Not only should we eliminate the stock market...we should eliminate money.

How? Please read my post and my (freely offered) ebook - both linked in my sig.

Thank you for your great post. You will get a star and a flag!

There is nothing wrong with the stock market i.e. private individuals investing in private companies. It's the scale of the stock market and the corruption and greed that collapses the system. It's no different than anything else. Companies need to start adopting a system where the wealth of the company is spread over its employees not some person half way around the world i.e. the investor. In the end the cornerstone of ANY business is to make profit, and corner the market share. How is that sustainable at all? It's not. Most businesses and the entire essence of capitalistic business systems are unsustainable. Just because I say capitalism is unsustainable doesn't mean I believe socialism or any other "ism" is the answer. If we can come up with billion dollar jet airplanes, decode most of the human DNA I think we as human beings can come up with a much better "ism" than those we've previously tried to live by. We engineer just about everything in the world nowadays yet some people believe that some how "social engineering" at least as far as economics is concerned is completely impossible and unnatural.

The only problem with any type of large scale, new and innovative economic system is that it will most definitely end up redistributing wealth. There HAS to be a redistribution of wealth in this world either by force or by some sort of new economic system. The world cannot continue down the path of haves and have nots.

Sure capitalism works great..........the workers and poor etc. defintiely see increases in prosperity..........but how are those increases compared to the increases in prosperity of the rich and those who hold the capital? The latter are much much bigger.

[edit on 14-12-2009 by Zosynspiracy]

[edit on 14-12-2009 by Zosynspiracy]

Originally posted by Zosynspiracy
There is nothing wrong with the stock market i.e. private individuals investing in private companies. It's the scale of the stock market and the corruption and greed that collapses the system.

Hear, hear !!! What most people fail to understand is that the stock market is simply a system of gambling...just like poker, blackjack, and horse racing. Just like in gambling, the games are usually fixed and the odds are always in favor of the casino. Just like in gambling, you can 'roll the dice' and make a lot of money, or lose it all...either way, it's not the same as starting a business or getting a job. Rather than ban the stock market, humans need to wake up and start seeing it for what it really is...simple as that.

reply to post by Zosynspiracy


I think you hit on a few big issues that deserve to be addressed. Indeed, there is nothing wrong with private individuals investing in private companies. I think the distortion begins when stake in a company can be bought from someone other than the company. That is the moment at which the abstraction begins. The stock ceases to be money invested in a company that manufactures A, but instead becomes an "Investment Tool". The imaginary nature of money blossoms from there.

I think that a post-Stock Market world would still have a monitored method for private investment. It's just that a person would need to buy directly from the company and sell directly back to them. The investment needs to be tied directly to what it is the company actually does. The trick, of course, is that human nature (in its current incarnation) is inclined to manipulation and deceit in the interest of greed, but that is where your second good point comes into play.

The -isms of the world are pretty much useless and silly. Still, without a some semblance of a common sense of values and beliefs (particular in matters as interdependent as economic stability), there is no chance of progress.

Weirdly enough, I think that some form of Objectivism may eventually be what the world needs. Now understand, nearly every single person I have ever encountered who claimed to be an Objectivist would clearly fall into the category of a "looter" if looked at in any genuinely objective and rational manner, so the current proponents of the -ism are spectacularly poor example of the system. All the same I think the kind of focus on production and creation, of actually providing a valuable and genuine service and being compensated in kind is that the world needs.

I'm not talking about their weird money fetishism that Ayn Rand eventually devolved into. I'm talking about a focus on the producers and creators. People need to believe that the reason to invest in a company is to see its vision come to fruition. They need to have faith in the rewards of real progress rather than mere market exploitation.

Would this represent a complete paradigm shift in mankind's understanding of work and money? Absolutely. That's why it is needed.

Originally posted by polychronopolis

Originally posted by Zosynspiracy
There is nothing wrong with the stock market i.e. private individuals investing in private companies. It's the scale of the stock market and the corruption and greed that collapses the system.

Hear, hear !!! What most people fail to understand is that the stock market is simply a system of gambling...just like poker, blackjack, and horse racing. Just like in gambling, the games are usually fixed and the odds are always in favor of the casino. Just like in gambling, you can 'roll the dice' and make a lot of money, or lose it all...either way, it's not the same as starting a business or getting a job. Rather than ban the stock market, humans need to wake up and start seeing it for what it really is...simple as that.

My concern isn't ultimately about the fact that people could lose money . . . or even gain money. My concern is with the fact that this gamble (and you do describe it rather accurately) actually impacts the way that massive corporations behave, and never seems to do so for the better.

It is the distorting influence that the market has on companies that makes it a danger to the economy. It is also the fact that it has been used to make people buy into the nonsensical notion that as long as the Dow is on the rise, the economy is good to go. This belief is foolish, pig-headed and wrong. If all the Dow Jones companies outsourced their entire operations, cut the wages of their 200 remaining US employees by 50% and sold all their crap to the underemployed masses at Wal-Mart the DJIA would go through the roof while the people starved in the streets.

And the people wouldn't both blaming the corporation because their 401(k)s would be worth an extra 100 bucks a month if they manage to live to retirement age.

Originally posted by orwellianunenlightenment
Excellent post. See, you are not just a chaos agent. You clearly shine light on kinks, and thereby, help bring about ultimate stability and order. Others should read. Yoda says, "A thinker you are."

Edit: There is one problem, but we can get our way out of it. Much of the wealth in the west is based on this illusory bologna. Remove the smoke and mirrors, and little is left. We are, however, excellent at dangling carrots, so maybe we should just come out, be honest, and say in a diplomatic way, most people have been monkeys, and as such, needed to be directed towards singularity. Or maybe we should just let history illustrate such. It saves face. But I am far more optimistic towards the future than most. I think we are on the cusp of something wonderful, but we must play the necessary roles. Godspeed.

[edit on 14-12-2009 by orwellianunenlightenment]

You read me more or less correctly. After all, inside every cynic is a betrayed romantic. True Anarchism believes in a spirit of cooperation that supercedes the need for Law.

To get from where we are now to where we should be we as a people must make our way through chaos. A wrench must be thrown into the works and when the Machine explodes, we will build something far finer from the spare parts.

Indeed, the transition to a stock market free society would be hard and weird, and many high rollers would be left festering on the roadside. It will be, as Darwin intended, an adapt or die orgy of insanity and public weeping. The system will be revealed and those judged as Responsible will be whipped in a public square all the while pleading that they had only inherited the system.

Such is life.

reply to post by RobertAntonWeishaupt


Yeah you got it all analyzed, but you miss one thing. The reason it works this way. The whole reason it seems so unfair to you is because..... it.... is.... unfair. It is rigged. It is part of the war machine and that is exactly the way we want it. What you are complaining about is basically something akin to saying the enemy has a better weapon and thus we should ban warfare.

Some day you will understand better. Maybe. For now you seem to not want the fight. Lucky somebody else does it for you. If you were to get involved and find your true sense of existence deep inside your mind and gut, then you would enjoy the fight. We are all here on Earth to subdue nature. That includes two-legged animals. To the victor go the spoils.

Originally posted by Zosynspiracy
There HAS to be a redistribution of wealth in this world either by force or by some sort of new economic system. The world cannot continue down the path of haves and have nots.

The world has continued with the division between the haves and the haves nots for thousands of years. If you force the redistribution of wealth, the haves will then not bother in making it. Guess who still loses?

Originally posted by Cabaret Voltaire
reply to post by RobertAntonWeishaupt

 

Yeah you got it all analyzed, but you miss one thing. The reason it works this way. The whole reason it seems so unfair to you is because..... it.... is.... unfair. It is rigged. It is part of the war machine and that is exactly the way we want it. What you are complaining about is basically something akin to saying the enemy has a better weapon and thus we should ban warfare.

Some day you will understand better. Maybe. For now you seem to not want the fight. Lucky somebody else does it for you. If you were to get involved and find your true sense of existence deep inside your mind and gut, then you would enjoy the fight. We are all here on Earth to subdue nature. That includes two-legged animals. To the victor go the spoils.

Where in my original post do I say anything about caring if the stock market is fair? I truly could not care less about the fairness of the stock market for investors. Those who choose to play that game (for surely that is what it has become) make their bets and take their chances. If someone is too stupid to manage their own portfolio, they should leave the market alone and leave it to the professionals.

To be clear, I've even made money in the stock market; not a spectacular amount, but then again I only play with house money (employer contributions into an almost foolishly flexible program).

My concern is that the stock market's contribution to the increasingly imaginary nature of finance, its shifting of public interest from Real Capital to Money Capital is actually working against not only humanity (and I understand that my passing interest in the good of mankind will have me branded as a pinko by some) but also against the real producers of the world.

My beef with the Stock Market stems from the shifting of power from those who can make and accomplish things to those who can most imaginatively cook the books. I posit that number manipulation which gave us the worldwide economic crisis took its first baby steps on the stock exchange, and as long as the system exists in its current form, the delusions are going to continue and this whole ugly cycle will repeat itself.