Who are these ‘shareholders’ we are all working to benefit?

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Modern economics states as either assumption or fact that the only goal of a corporate manager is to maximise profit delivered to shareholders.  Other considerations, such as society and the environment, are not of any concern when developing corporate strategy; only profits matter and they must be made at any cost. [1] There is no attempt to justify this view, it is given as a kind of religious orthodoxy and an axiom that needs no explanation.  There are other many organisational approaches to the pursuit of business that take into account social and environmental debt that operate extremely effectively today.  There is no need to pursue short term profits exclusively.

Which leads to another important question; who exactly are these shareholders that we are told all corporations must dedicate their existence to serving?  We are led to believe by mass media that anybody can buy shares, therefore most people do benefit from this system.  The truth is very different. The real problem is, the vast majority of these ‘shareholders’ ARE the executives handing themselves ever increasing salaries and bonuses.  So the people telling you that they need do anything to benefit shareholders ARE the shareholders they are seeking to benefit.

“The top ten percent have 81% to 94% of stocks, bonds, trust funds, and business equity, and almost 80% of non-home real estate”[2]

This statistic is from the US in 2010 goes to explain completely the often quoted statistic that the rich suffered more than the poor in the crash of 2008.  The truth is the top ten percent of the population bore the brunt of the share market crash because they owned almost all the shares.  As of 2013, they have now largely recovered, whilst the fortunes of the majority of the population have not.  For the majority, life has got worse.

The same trend is true in Australia with just 38% of the population owning any such investment and of those, the majority are held by people in the top ten percent of income earners – about 15% of the total population.[2]  This shows that Australia is not as extreme in terms of this wealth inequality, but not for a lack of effort by increasingly neoliberal governments.

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