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View Diary: Cuccinelli Campaign Cites Far-Right-Wing Radical Group as Backing for Its Economic/Tax "Plan" (4 comments)

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  •  Trickle down & shareholder value capitalism (5+ / 0-)

    are totally incompatible.

    Under earlier capitalist systems, the notion that corporate success could trickle down to the workers was valid.  Increasing worker productivity used to translate into higher wages and shorter hours.  

    Capitalism was "good" because it produced increasing wealth for society (Adam Smith's book was titled "The Wealth of Nations", not "I Got Mine").  Many businesses were organized to benefit not only the shareholders, but the workers and the community in which they operated.  They didn't do this out of the kindness of their corporate hearts--unions pushed them, regulations pushed them and social norms pushed them (greed wasn't good, it was a sin).

    In the mid 70's, shareholder value capitalism began growing.  This notion of capitalism says that the only reason for a corporation for a corporation to exist is to increase shareholder value.  Under this system, the corporation has no responsibilities to its workers or the community in which it operates.  Unions and regulations stood in the way of optimizing shareholder value and were dismantled.  Productivity gains that once were shared with the workers as higher wages and shorter hours are now retained by the corporations.

    We now have a generation that has never seen any organizing principle other than shareholder value and this means that in addition to the loss of unions and regulations, we also have lost the social norms that constrained the rapacious behavior of corporations.

    Trickle down cannot exist with shareholder value capitalism because that system demands that every bit of value the corporation generates is returned to the shareholder--not to employees or the community.

    So, the next time someone mentions trickle down--ask them if they believe the purpose of a corporation is to return value to the shareholder.  If they do, ask them how such a corporation could ever allow any wealth to trickle down--wouldn't that violate its reason for being?

    We kidnap. We torture. It's our policy. Embrace it or end it!

    by Mosquito Pilot on Sat Aug 24, 2013 at 06:28:50 AM PDT

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