Old fashioned investment

Apparently, well-heeled persons suffer a conundrum of what to do with recent profits.

And, mind you, the term "person" these days is meant – legally speaking – to refer to organisms of the homo sapiens species and -- thanks to SCOTUS -- now corporations. Both now have rights of free speech, after all, so one must show proper respect.

(By the way, would that be a conservative development, or an outright liberal, à la Roe v. Wade, development? But I digress.)

Accordingly, I offer my assistance to these persons with help for some resolution of their ethical conundrum.

The first impulse is to plow back earnings into investments, especially the derivative and other hyper-finance products that have been so beneficial to our economy as of late.

The second impulse is to provide increased dividends to stockholders. That might help stave off uncomfortable stockholder meetings and possible ousters of officers, CEOs and the board.

But these unpleasantries are relatively rare, since board members are interrelated by bonds of Wall Street incest – a seething relationship that has fostered a groupthink that, in turn, produces economists like Larry Summers and cabinet members and federal reserve chairmen who intone, ritually, incantational assurances that the hyper-finance collapse was not – what I thought, stupid me – a failure of their theoretical model, but was a demonstration of the robustness of their economical theory.

Here I had assumed that the Wall Street meltdown had made chumps of all economists. But it turns out that the collapse itself had proven the rightness of their ways.

There you go.

I guess I should reconsider my dark notion that the Wall Street collapse was really the largest shift of wealth away from the middle class and the poor, and the most radical particularization of wealth into the coffins – I mean, coffers – of a few. This, as it turns out in the equations of the wise, is not so. The Emperor's clothes are beautiful, are they not?

The third impulse simply does not occur to anyone. Creating jobs – creating "make-work" positions – if only to increase the numbers of the gainfully employed – is just a bad idea these days.

Against these impulses, especially the first two, I suggest a simple old-fashioned idea:

Distribute the profits to the poor.

This can be done in several ways. I discourage the giving of cash. Housing would be nice. Good land would be better. A cow. Some chickens. A good education in the trivium and quadrivium is essential. Something along the line of medical assistance would be okay, but I dare not mention the word "healthcare" here, since the term itself is trip-wired to a zip-lock bag of napalm.

I think this was done before. I can think of one example in Catholic Spain, where the surplus of public wealth was given to the destitute.

But then, as is now the expedient practice in the religious business of wealth-protection, there were those who took umbrage. Sir James Stewart suggested that this was no good. "The regulation of need" – not charity – was better at effecting social control and increasing the population.

The logic of Sir James is insurmountable. If one does not distribute surplus in public charity, then one has more to invest in future profit-making industry.

There are two good consequences here. An improved industry will reap more rewards to the self: huzzah. And, even better, the "element of need among the workers" is constantly preserved. Workers are happy to work. Happy to be disciplined. Double-huzzah.

If one wanted to gather more of these "huzzah's," then the only thing that certain "persons" would have to do is to wait for a while. Hold back. Make the workers appreciate work. Build up that "element of need."

Never mind the tongue-in-cheek tone of this post. I should not have to say it, but in this pedestrian climate of howitzer-inanity (e.g., last night's 'Reality TV" political debate), I have to say out loud that I disagree with impolite forms of redistribution of wealth. One mustn't, after all, touch the third rail of Christian conservatism, which is the dirty secret that there is nothing very conservative Christian about Wall Street ethics or Wall street metaphysics. Perhaps liberal, yes, and perhaps (and especially) calvino-voluntarist heterodox: but not old fashioned Christian.

Like giving to the poor is.

Comments

[Steve Hayes]

Concerning corporations as judical persons: the idea that they were not was the principle used by the Bolsheviks in the USSR to deprive the church of its buildings. They said that the church could not be a judticial person, and that therefore it could not own land and buildings, but could only lease them from the state.

[Fr. Jonathan]

Thank you Diane.

And melxiopp, your name is hard to pronounce. You point out a troubling reality, and that is: is all that one claims to be his under the rubric of his wealth really his?

It was a dangerous thing to do, defending any sort of taxation. These days, Ayn Rand-spouting libertarians are suggesting a situation that could only be realized in cartoons.

[Dianne]

Great post, Father. And melxiopp, your response is excellent. Thank you both.

[melxiopp]

"Distribute the profits to the poor" is not really possible for the modern corporation as its sole, clearly defined end is to increase its value for its owners. However, the intent of your suggestion is fitting, which is why persons - individual and corporate - are taxed and should be taxed.

I had a few posts on taxation recently, about how it is not theft, etc. and got a lot of push back. I think it odd that persons assume their mercantile and financial activities are in a vacuum apart from things like rule of law, property rights, the courts, public health, government, defense, the police, universal schooling, utilities, regulations, a currency, peaceful and orderly elections, etc. All these things are necessary bedrock to the sorts of profits possible in our economic system. Those persons - again, individual and corporate - need to pay the price of the bedrock that makes such wealth possible. The trader alone, mono a mono does not create millions and billions; those millions and billions are dependent on the entire system that puts him in a position to make such wealth. Such wealth is not for him alone or his alone, properly, but his and the society's together that have allowed such.

There is an economist who did a study attempting to identify all the causes of wealth in a society. He was able to correlate only about 30% to individual factors, the remainder were soft factors such as I mentioned above. It's the ________ remainder or something, named after the economist.

There was a documentary on Hubert Humphrey last night on PBS. I didn't see much of the Vietnam era stuff, but his early vision and rhetoric was certainly attractive. Isn't one supposed to get more Republican as you get older?...