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Capitalist Owners of the Corporate Economy

As any school student knows, Capitalism is supposed to be based upon ownership of a business venture. Whether private or corporate, this proprietary claim is founded on the principle of property.  To deny the legitimacy of this right, is to forego the sovereignty of the individual. For People to be Free, they must retain the right of ownership, especially as applied to a business. But owning a company does not guarantee that its control is under your command.

In an excellent account entitled: "The Sophistries of Capitalism", Robert Locke pokes holes in many of the false beliefs that cloud a real understanding of our current economic system. The aspect that warrants a closer scrutiny is the difference between ownership and management. Since control of business decisions drives the direction and operations of any enterprise, it is often confused to fall within the purview of management. This error in reasoning has allowed an entire class of corporate administrators to usurp control from the rightful owners of equity traded companies.

by Robert Locke

As any proprietor of a small business knows all too well, the buck stops with the check signer. The primary responsibility for success or failure rests on the talents and dedication of the owner. So why should this essential component be any different when it comes to large multinational organizations? The simple reply that they are far too complex for those who own the equity shares in the company, does not negate the basic principle. The ultimate claim for management decisions and legitimate authority lies with the ownership interests.

With the introduction of mutual funds and pension programs, the concept of the money manager emerges to relieve the financier in stock from the day to day monitoring of their investments. Then with the invention of exotic instruments like derivatives, a foreign lexicon of perplexity was created that required the expertise of specialists to decipher the meaning of all the complexity. All during this transformation from the simple principle of ownership to the conglomerate of whiz kid managers, the CONTROL of the business was eroded from its rightful owners.

So no one should be surprised when the Enron fraud becomes the terminal swindle of their owners. Can anyone imagine the preposterous distortions necessary to craft pension rules that prevented employees from selling their ownership shares, as the price of their equity nose-dived to penny stock levels? The State/Capitalism culture has methodically expropriated the rightful authority of the owner, in favor of a deceitful class of transient managers, touting manipulators and shielded thieves.

The direct complicity of government regulators allows the control of most economic structures to be denied from their capital investors. The mutual goal is to share the power. Approved management, gets the blessings of State created monopolies. An entire financial superstructure from accountants, merchant bankers, insurance and market makers grows in prominence, while the equity owner is relegated to watching the ticker on the non stop info commercial that passes for business reporting.

Mr Locke is right on target when he exposes the myths that we live under capitalist society. The only markets that are free to compete are those that refuse to follow the pattern of government approved business. Those that adopt the culture of the Capitalist/State axis, surrender their independence of market competition, for the safety of a government approved protection racket. In the process, the owners of these companies, are deposed from any effective control of the companies that they own.

Just  blaming corporate managers for abusing their positions avoids the real issue. Golden parachutes are a symptom not a cause of the loss in control. Investors have forgotten that corporate executives are their 'hired help'. Trading your rights and responsibilities as an owner for the promises of next quarters performance, is pivotal to preserve the mirage that passes for enlightened management.

Remember the salient relationships of business are consistent for any era of commerce. A seller needs a customer and a buyer must make a purchase, or create the product or service for themselves, or do without. The original decision of the consumer drives the transaction. The distortion that has occurred, is that the corporate economy operates as a dispenser; for what has become, mandatory products and services. Most consumers are conditioned and socialized into accepting incidentals as necessities. And when it comes to providing a reliable supply of real indispensables, available options are systemically limited to those provided under the marquee of Corporate/State approved players.

Holders of equity companies, own zero value, when the financial conditions of a company are fraudulently reported by CPA firms. What exists is the ghost of profits, magnified into price earning ratios that defy gravity. Corporate management provides the raw deception in bogus data, while the public accounting industry, fabricates plausible deniability. The manager club, protects their sect of 'whatever it takes' conduct, by defrauding the rightful owners. Falsely inflating stocks with the dissolution of dividends, feeds the fad that an ailing company is healthy.

We need not reinvent the rules for genuine business. They remain intact. Redress requires a political reform. Rights always reside within the individual, and no government can legitimately elevate a corporate entity to equal human status. The greatest of all sophistries is that government will protect and promote capitalism. All Statists, despise free citizens. The final result of losing control of financial independence is the Globalism of all economic activities. The big winner is always the State. And the inevitable loser is anyone who resists.

Isn't it time to fire the 'public servants'? Just like the corporate executive, their board has ignored their pledged responsibilities and refuse to serve the real owners. Bring sanity back to Wall Street, requires practicing authentic Capitalism. The perversion that masquerades as Capitalism is an insult to every person that strives to achieve economic independence, which is the only formula for real and lasting security. Take back your government, so you can run and benefit from your own businesses. We need new management that reports directly to the real owners.

SARTRE

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Whoever originated the cliche that money is the root of all evil
 knew hardly anything about the nature of evil and very little about human beings.
Eric Hoffer

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