Tyranny of the markets: we are our own slaves
Recent decades have seen the birth of a living cold, disembodied, with his hands the destinies of the world economy. Subject to its laws, we must also adapt to his mood: sometimes euphoric, sometimes panicked, sometimes chilly policy penalizing a business, sometimes applauding an ambitious investment plan. I'm talking about the market. This entity seems to have the characteristics of a living being. Yet we are indeed facing a human construct as we remember the Archbishop of Canterbury (head of the Anglican Church) in a rare moment of clarity:
"Behind this, however, lies the ethical problem well deeper. We find ourselves talking about capital or the market as if we were talking about individuals, driven by objectives and strategies capable of making choices and discourse with reason about how to accomplish them. We lose sight that these are things that we have built. These are a set of practice, practice, agreements that have emerged both voluntarily and by chance. From the moment we speak of them as living entities independent, we are forced to make many mistakes destructive. We expect an abstraction called "the market" to produce the common good and it regulates its own potential excesses by a sort of caution and innate moral sense, like a living organism or ecosystem . We call "business" to gain a sense of social responsibility and moral. And we lose sight of the fact that the market is not as much awareness individual, that business is conducted by men who must make choices regarding priorities. The market is not a machine governed by inexorable laws.
[...] The biggest challenge that we confront the current crisis is to be able to find meaning in the link between money and material reality - the production of specific commodities, the performance certain human goals that have something to do with a shared sense of what is good for humanity [...]
[...] Give an independent reality to an object that you actually built yourself is a perfect definition of what the Christian Scriptures call idolatry Jewish st "
Unlike an underlying message very widespread, market did not exist as such. This is not a "natural" forces, which the state power should be opposed to calm the excesses, speeches in which falls very same policies regularly left. The shape depends mainly a market laws, implicit agreements and habits within a given social group.
For 30 years, we experience a particular form of "tyranny of the market." A liberal discourse, called "neoliberal" I personally would describe anarchist inseminated in the minds of key economic actors (entrepreneurs, financiers, politicians ...) that maximizing shareholder wealth was, if not the only goal, the absolute priority of the management of an enterprise. At the same time, the economy has largely financialized, and a large number of companies held by private shareholders (non-publicly traded) have moved to a public shareholding (listed). For proof, just realize that the funding of French companies has increased by 100 between 1970 and 2005. A third movement saw the internationalization of capital markets. Consequently, the vast majority of the capital side in France is held by foreign funds.
The consequences of these three phenomena are hardly debatable multiple. First, it is now virtually impossible to know who owns a business. Capital is held by a crowd of various funds and varied and individual fortunes. Thus the master is invisible. It is disembodied. Leaders do not know a thing about him: he wants to maximize the return on its investment. Whether CEOs s'attellent this spot is actually a very complex issue on which it seems impossible to meet the views of my current knowledge. By cons, it seems clear that the only message that corporate executives are owners is to maximize their financial income. If an owner asks his gardener to mow the grass only, this does not mean he will do this task properly but you can almost be sure he will not get to trim trees on his own. Thus
has imposed a dialogue of the deaf between public opinion and politicians on one side and business leaders on the other. If we worry about relocation, lack of investment, gaps in research and development, risk taking minx, stagnant real wages, deplorable working conditions, the precariousness of employment, the environmental and social impact of a company, the answer will invariably be the same "these issues are very important for us, but the priority is to satisfy the requirements of profitability for our shareholders. " You want to talk to "those shareholders," they were not found and hide behind the nebula called market. Thus, like the Jewish people for 3,000 years subject to the law of Moses, our companies are subject to a timeless message from the idol contract that would have made this one commandment "Thou shalt maximize the wealth of your shareholders' .
This speech is so ingrained within the business community that any change in attitude is purely utopian. It was with amazement I discovered, for example this passage from the end of laissez-faire Keynes writing in 1926, speech that must have seemed a commonplace to drive 50 or 60 years:
"But evolution taken by joint stock companies once they have reached a certain age and a certain size, becoming almost more public institutions than private companies. One of the most interesting developments and least discussed of recent decades has been the trend for large companies to socialize themselves. There comes a time during the growth of a great institution (Particularly a railroad company or public infrastructure but also a large bank or a large insurance company) where owners of capital, ie shareholders are almost entirely dissociated from the direction of the company. Consequently, the realization of large profits interest becomes quite secondary in the eyes of management . When this stage is reached, the stability and reputation of the institution become more important for management than maximizing shareholder profits. Shareholders must be satisfied by conventionally adequate dividends, but once secured, the direct interest of management is often to avoid criticism from the public and customers of the company. This is especially true for companies with large or semi-monopolistic position attracts attention. The extreme example of this trend in the case of an institution theoretically owned by private persons is the Bank of England. It is almost true to say that there is no class of persons within the realm to which the Governor of the Bank of England thinks less when making a decision that its shareholders. [...]
[...] This development is not only beneficial. The same causes promote conservatism and the decline of the initiative. In fact, we have often seen in many cases the same advantages and disadvantages in the same state socialism. Nevertheless, we see here, I think, a natural line of evolution. "
This small step back in time reminds us that the company did not always follow a single goal.
The question remains in abeyance. How to ensure that companies are encouraged to promote the interest of other values without going through a financial nationalization which we know the faults and appears to be completely anachronistic. We must first identify the real master in this story. The master is money. The money with which you buy shares. Whose money? To everybody. The small investor to the large fortune, the shareholding is distributed among a crowd of people. Most have invested their money in the bank and are not aware that their money was invested in a particular company. Despite the highly unequal distribution of wealth in France, the French hold on the final actions a value greater than the capitalization of all French companies. The conclusion of this little argument is tragically simple: we are the market. We establish the tyranny of short-term. Not that this is voluntary. The process of delegation of investment of savings is in charge of our own slavery. It is our obvious lack of desire to use this power that is our money that is involved.
Yet I sincerely believe that most investors would be willing to exchange a few tenths of a percent of return in exchange an ethical policy on the part of companies in which they invest. What is missing, it is a legal framework to allow shareholders to defend common values, ethical structures of reference to put his money and finally a realization of large-scale social and economic power that has our money. If the state must regain control of money creation as I have argued on this site, it is time we resume control of our economic destiny by taking advantage of this extraordinary tool of power that is potentially money.
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