Thread by @AlexandraErin

On the stock market... sometimes I see people saying "We should abolish the stock market, it produces nothing."

I think if we abolished the stock market, it would come back in some form. It answers a need. I also think it's a very beautiful thing, marred by the flaws in society.

The stock market is fundamentally a very democratic idea, distorted by other aspects of our economic thinking. It's basically human society in the abstract, the idea that we can do more and have more when we pool our resources, work together, specialize.

Let's start with a premise: labor is entitled to all that creates. If we return to a fabled State of Nature and you pick a berry, you have a berry. If you make a flint knife, you have a flint knife.

If someone kills you for your berry and your flint knife, they have them.

Now that last example isn't what we think of as "labor" but as killing a goat entitles you to what the goat has, we really should have some concept of society in order to make clear that taking things from other people by force is not the same thing as laboring for something.

So now we're abandoning the fabled state of nature (which I call "fabled" because we are gregarious animals and social inclinations are part of our nature) and now our labor gets more complicated. If Thog knaps a stone tool which Grog uses to work leather that Smog hunted for...

...we have three people's labor going towards one final product. But! If each laborer is dedicated to this one task instead of each of them pursuing all three crafts separately, their output will be of better quality and quantity.

And in fact, Smog's hunting is far better if it's being done in concert with other hunters, and they were all fed and sheltered and clothed and reared by the labor of others. In this state, it's likely that everybody in their society simply works towards the goal of survival...

...which they all share in. But as they get better at the crafts that go towards survival, efficiencies pile up and mere survival is no longer the goal and they begin to produce surplus goods and also novel ones. Society grows and becomes more complex!

Now let's zip ahead to today. If we were to adopt a creed of "labor is entitled to all that it creates" and apply it to society... I mean, I create words and meaning and entertainment but sometimes I want a hamburger. And people who create hamburgers want other things, too.

So we would still have money, which acts as a form of Stored Labor Value. Money is not the problem in our society; it's how the money is apportioned and the full extent of things it is used for. Ideally it'd be for trading with one another, not "not dying" or "winning elections".

Now as in the days of Thog, Grog, and Smog, we can do more, accomplish more when we pool our resources and our labor.

And since we have money, which acts as a form of Stored Labor Value, we can even do this remotely and abstractly.

Your friend Stevog wants to open a faux leathergoods business but while he has the necessary skills he doesn't have all the necessary materials. He needs someone to pool resources with him.

Your labor doesn't produce those materials. But you have stored value to trade for them!

By buying the materials and giving them to Stevog, or just lending the money, you are indirectly joining the business. Since it's your labor that procured the materials, you are entitled to a share of what the business creates, same as if you'd done the work directly.

This is what people mean when they refer to owning stock as having "an interest in" or "a stake in" a business.

Now, in this example, you know Stevog and you're dealing with each other directly. This limits participation and thus opportunity to people who know the right people.

Think of a stock exchange as a big message board where people can post things like "Have chickens, need vegetables to make soup." or "Have vegetables, not sure what to do with them, any ideas?"

Except because we've got this Stored Labor Value, it's all way more abstract.

So it's all "I own part of this company and I want to sell." "I want to own part of this company and I'm willing to buy.", with the occasional "Our business is looking to grow but we don't have everything we need to grow so we're willing to not own all of our business for money."

If we abolished the concept of a stock market... banished the idea, wiped all concept of investment from the collective consciousness of humanity... it would not be one day before somebody saw a chance to "buy in" to someone else's endeavor, and eventually we'd wind up here again

The problems with this very democratic idea basically come down to the problem of capitalistic "competition": that the thing you are rewarded with for winning in the competition of the free market is also the gamepiece used to compete.

And also the fact that under our current construction of business ethics, the business is assumed to owe more to the stakeholders whose investment theoretically represents the ground floor costs of the business than it owes to the laborers whose ongoing work produces value.

If we were to amend those ways of thinking... well, success in the stock market would be less disproportionately lucrative so possibly it would grow slower. But more people would be participating so possibly not.

Recognizing employees as stakeholders to whom the company owes a duty -- that they are as much or more the company as the investors who merely spent money to acquire a piece of it -- would be a seismic shift in our culture, and a better one than trying to abolish investment.

Because if you are entitled to the fruits of your labor, you are necessarily entitled to do whatever you want with those fruits, including using them to bankroll somebody else's ideas, which is what investment is at its most basic.

And if you're allowed to use your labor to buy an interest in someone else's concern, you've got to be allowed to sell that interest, and if enough people think that interest is worth more than you paid for then the value of it has gone up, and that's the stock market.

So the real problem here is that money is not primarily a measurement of the value of your labor, because most of it is in the hands of people who have extracted value from labor of others, or who inherited it from people who did so.