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Am I alone in thinking that the Stock Market is immoral and irrational? The reason I believe it is, is because a company should grow as far as it can by the individual instead of a group that makes money for doing nothing and allowing a company to grow only if they feel like it. The group can also make the creator of the company leave if he doesn't bow down to their will.

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Am I alone in thinking that the Stock Market is immoral and irrational?

Alone among Objectivists. While certain stock trades may not be completely rational the existence of the stock market is completely rational and thoroughly moral. It facilitates free trade between those who wish to engage in it.

because a company should grow as far as it can by the individual instead of a group that makes money for doing nothing and allowing a company to grow only if they feel like it.

Stock traders hardly do nothing -- they facilitate trade. They help raise capital for investment so they help both the business owner by raising that capital and they help investors gain a return on their money which far exceeds other types of investment. Free trade is a win-win scenario. Hopefully you wouldn't want to prevent two people from freely trading with each other.

The group can also make the creator of the company leave if he doesn't bow down to their will.

Not really. The creator of the company holds all the power initially and as he sells shares in the company he dilutes his ownership, but you'll note that many creators retain 51% or more of their companies in order to avoid the circumstance to which you allude. If at some point the share holders own more than 51% of the company, then they are the majority owners and should be free to exercise that privilege. No one forced the original owner to sell his majority stake. Again, it was free trade.

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Am I alone in thinking that the Stock Market is immoral and irrational? The reason I believe it is, is because a company should grow as far as it can by the individual instead of a group that makes money for doing nothing and allowing a company to grow only if they feel like it. The group can also make the creator of the company leave if he doesn't bow down to their will.

No individual is compelled to sell shares of his company or to have those shares made public. It's a choice. There are consequences and/or risks associated with making that choice, but it is a choice.

You don't seem to allow for a group of people making the right decisions -- and, in general, decisions that are profitable to stock holders are decisions that will be profitable to the company (not always, of course, but in general).

Yes, it is possible for stockholders to remove the creator of a company, but it does not follow that that decision is always the wrong decision for the company: a friend of ours created and developed a company that makes ballistic parachutes for light aircraft. At some point he decided to sell public shares. Years later, the board of directors removed him as CEO because he had a tendency to treat the company's assets as his own. It was fine when he was the sole owner, but the stockholders had legitimate concerns. Our friend was a great inventor, but not a sensible businessman. Frankly, it's a good thing they took him out of the position where he could use company assets for personal expenses.

So no, I don't think the stock market is necessarily immoral or irrational.

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Alone among Objectivists. While certain stock trades may not be completely rational the existence of the stock market is completely rational and thoroughly moral. It facilitates free trade between those who wish to engage in it.

I don't see how it restricts it, for a company can still do it without going public

Stock traders hardly do nothing -- they facilitate trade. They help raise capital for investment so they help both the business owner by raising that capital and they help investors gain a return on their money which far exceeds other types of investment. Free trade is a win-win scenario. Hopefully you wouldn't want to prevent two people from freely trading with each other.

I am not against free trade, not in the slightest, for if a man wants to trade with another country, company, or sale a product that is not violent, coercive, or forceful in nature.

Not really. The creator of the company holds all the power initially and as he sells shares in the company he dilutes his ownership, but you'll note that many creators retain 51% or more of their companies in order to avoid the circumstance to which you allude. If at some point the share holders own more than 51% of the company, then they are the majority owners and should be free to exercise that privilege. No one forced the original owner to sell his majority stake. Again, it was free trade.

True many do retain, but why should anything be publicly owned other than local courts, local police, and a small armed forces?

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Am I alone in thinking that the Stock Market is immoral and irrational? The reason I believe it is, is because a company should grow as far as it can by the individual instead of a group that makes money for doing nothing and allowing a company to grow only if they feel like it. The group can also make the creator of the company leave if he doesn't bow down to their will.

Of course you're not alone, but I don't think this view is compatible with Objectivist ethics. Let's look at the points raised against the stock market:

"because a company should grow as far as it can by the individual" Why? Is there something wrong with social cooperation and the division of labor? If so, it would mean the death of the human race in short order. Social cooperation is a great value to mankind. I think this likely rests on a mistaken view of individualism as some kind of social atomism.

"a group that makes money for doing nothing" I think you are mistaken in believing investors and shareholders do nothing. This rests on the communist view that capitalists are idle parasites that contribute nothing to the production process and extract value from the workers via exploitation. The short version of a big economic topic, and there are obviously pros and cons about issuing debt versus equity and incorporation that apply to the specifics of the situation at hand; but in general, the point is that it is not possible to produce without capital, which the saver-investor-capitalist-entrepreneur has the vital function of providing. CF. Mises Planning for Freedom, chapter 17 "Profit and Loss" or Murphy Lessons for the Young Economist, chapter 14 "The Stock Market" or Rothbard The Ethics of Liberty, chapter 7 "Interpersonal Relations: Voluntary Exchange" or Machlup The Stock Market, Credit, and Capital Formation.

"allowing a company to grow only if they feel like it" Presumably this would apply to the above mentioned sole proprietorship run by a single individual that you recommend as the legal limit as well, so it is unclear why this is an issue at all. This is the case with every human endeavor, so why someone should be forced to grow a company if they didn't feel like it, or that this is even possible, or that they wouldn't just go out of business?

"The group can also make the creator of the company leave if he doesn't bow down to their will" I can also kick the guy who built my house out of it if he doesn't bow down to my will. The reason being that I own it, as do the owners of a company. Unless we know who owns what, it isn't very helpful to complain about someone getting kicked out of something.

Edited by 2046
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True many do retain, but why should anything be publicly owned other than local courts, local police, and a small armed forces?

Equivocation is classified as both a formal and informal logical fallacy. It is the misleading use of a term with more than one meaning or sense (by glossing over which meaning is intended at a particular time).

public ownership — n

1. ownership by the state; nationalization

2. A public company usually refers to a company that is permitted to offer its registered securities ( stock, bonds, etc.) for sale to the general public, typically through a stock exchange...

Because you have a right to sell shares of ownership to the public (2), but you don't have a right to expropriate someone else's property (1).

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True many do retain, but why should anything be publicly owned other than local courts, local police, and a small armed forces?

You're confusing the term "public" when used to denote government institutions, and "public" in a more general sense, meaning citizens. All of the things you mention are institutions of the government. However, the stock market is engaged in by individual citizens or groups of individuals -- the "public" in the latter sense of the word.

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Of course you're not alone, but I don't think this view is compatible with Objectivist ethics. Let's look at the points raised against the stock market:

"because a company should grow as far as it can by the individual" Why? Is there something wrong with social cooperation and the division of labor? If so, it would mean the death of the human race in short order. Social cooperation is a great value to mankind. I think this likely rests on a mistaken view of individualism as some kind of social atomism.

"a group that makes money for doing nothing" I think you are mistaken in believing investors and shareholders do nothing. This rests on the communist view that capitalists are idle parasites that contribute nothing to the production process and extract value from the workers via exploitation. The short version of a big economic topic, and there are obviously pros and cons about issuing debt versus equity and incorporation that apply to the specifics of the situation at hand; but in general, the point is that it is not possible to produce without capital, which the saver-investor-capitalist-entrepreneur has the vital function of providing. CF. Mises Planning for Freedom, chapter 17 "Profit and Loss" or Murphy Lessons for the Young Economist, chapter 14 "The Stock Market" or Rothbard The Ethics of Liberty, chapter 7 "Interpersonal Relations: Voluntary Exchange" or Machlup The Stock Market, Credit, and Capital Formation.

No I do not view capitalists as such since all of our innovations have come from those who changed industry and the collectivist would never allow since things to exist with the regulations they wish and companies worked fine without the stock market before and I believe it can still.

"allowing a company to grow only if they feel like it" Presumably this would apply to the above mentioned sole proprietorship run by a single individual that you recommend as the legal limit as well, so it is unclear why this is an issue at all. This is the case with every human endeavor, so why someone should be forced to grow a company if they didn't feel like it, or that this is even possible, or that they wouldn't just go out of business?

If I sound like I want it to be law I'm sorry. I am attempting to say there should be no stock market, but if someone wishes to share their company for whatever reason they can, but they can do it without the stock market.

"The group can also make the creator of the company leave if he doesn't bow down to their will" I can also kick the guy who built my house out of it if he doesn't bow down to my will. The reason being that I own it, as do the owners of a company. Unless we know who owns what, it isn't very helpful to complain about someone getting kicked out of something.

I know that they own it and they can do what they wish as a group, but I still prefer single ownership to group.

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You're confusing the term "public" when used to denote government institutions, and "public" in a more general sense, meaning citizens. All of the things you mention are institutions of the government. However, the stock market is engaged in by individual citizens or groups of individuals -- the "public" in the latter sense of the word.

Perhaps I am, so I apologize for that, also can't a person chose to be publicly owned, I may disagree with public ownership, but others don't and can't it work without a stock market.

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Perhaps I am, so I apologize for that, also can't a person chose to be publicly owned, I may disagree with public ownership, but others don't and can't it work without a stock market.

It's hard to decipher what you're trying to say, but if you are asking if a company owner can choose not to sell shares in his company or to go public with those shares, then yes, he can. He might be depriving himself of the potential capital needed if he wishes to grow his company, but he can choose to do so.

What is your problem with the stock market? Please be specific, as I do not understand your objection.

Edited by Avila
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It's hard to decipher what you're trying to say, but if you are asking if a company owner can choosf he wishes to grow his company, but he can choose to do so.

What is your problem with the stock market? Please be specific, as I do not understand your objection.

I never have been good at explaining things, so I'll try my best. I guess you could say I hate what the stock market has become and I prefer capitalism to corporate capitalism(corporatism). I could see something like the stock market working if everyone was rational and reasonable. I also don't like how our currency is tied to what the stocks are, but maybe that comes from a lack of understanding on my part. I hope this explains it better for you.

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I never have been good at explaining things, so I'll try my best. I guess you could say I hate what the stock market has become and I prefer capitalism to corporate capitalism(corporatism). I could see something like the stock market working if everyone was rational and reasonable. I also don't like how our currency is tied to what the stocks are, but maybe that comes from a lack of understanding on my part. I hope this explains it better for you.

Well, no, it doesn't explain it -- sorry.

When you say you hate what the stock market "has become" -- this presumes a time when the stock market was not what it is now. What, then, are the differences between what the stock market "has become" and what it once was?

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Well, no, it doesn't explain it -- sorry.

When you say you hate what the stock market "has become" -- this presumes a time when the stock market was not what it is now. What, then, are the differences between what the stock market "has become" and what it once was?

It went from rational self interest to irrational self interest. That is what I am assuming it was once with the books the users are recommending me, not to mention the fact of corporate bribes to the government and the government getting involved with the corps, by passing laws and regulations to help them out.

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Oh, okay, I get you. You don't say it should be illegal to sell shares of ownership in a company, though it is immoral, but that the stock market should be banned. (I hope I have this right.) But the problem is that this is what the stock market is: a bunch of people selling shares of their company.

Surely there is nothing inherently immoral about that, according to Objectivist ethics? Now certainly, since morality is contextual that's not to say that every sale is automatically moral. I can be a crack dealer or something (just for an obvious example) and selling destructive substances to addicts isn't exactly life-affirming, though I have the right to do it. But the point is that we can't say that there is a reason to always prefer a sole proprietorship over a corporation, and that if a person sells away shares of his company, then the new owners are automatically wrong in telling him to get lost, if they choose such a course of action. Wouldn't it be fair to say that that depends entirely on the context and the reasons involved for these transactions?

So if there's nothing inherently wrong in the reasons you give, I think you should reconsider these premises. Again, I think there may be a mistaken view of individualism at root here.

Now, of course, there is a lot of regulation and exploitation as a result of state intervention into the stock market, but it doesn't follow from that that the stock market should be banned or is immoral. Why wouldn't it just be that the intervention and exploitation (initiation of force) should be banned and the stock market would just be free and unregulated?

Edited by 2046
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Oh, okay, I get you. You don't say it should be illegal to sell shares of ownership in a company, though it is immoral, but that the stock market should be banned. (I hope I have this right.) But the problem is that this is what the stock market is: a bunch of people selling shares of their company.

Surely there is nothing inherently immoral about that, according to Objectivist ethics? Now certainly, since morality is contextual that's not to say that every sale is automatically moral. I can be a crack dealer or something (just for an obvious example) and selling destructive substances to addicts isn't exactly life-affirming, though I have the right to do it. But the point is that we can't say that there is a reason to always prefer a sole proprietorship over a corporation, and that if a person sells away shares of his company, then the new owners are automatically wrong in telling him to get lost, if they choose such a course of action. Wouldn't it be fair to say that that depends entirely on the context and the reasons involved for these transactions?

So if there's nothing inherently wrong in the reasons you give, I think you should reconsider these premises. Again, I think there may be a mistaken view of individualism at root here.

Now, of course, there is a lot of regulation and exploitating as a result of state intervention into the stock market, but it doesn't follow from that that the stock market should be banned or is immoral. Why wouldn't it just be that the intervention and exploitation (initiation of force) should be banned and the stock market would just be free and unregulated?

Bingo you got me yes there is nothing wrong with someone choosing to make their company public, though I wouldn't, but I could change that view since I am still only a child(20). Maybe I jumped to a big conclusion about the stock market and it would work in an objectivist society, but even if the initiation of force was taken away, since not everyone that owns corps are objectivists they will find a way to get their parasitic way, maybe I'm being too cynical, but that is just what I think will happen.

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It went from rational self interest to irrational self interest. That is what I am assuming it was once with the books the users are recommending me, not to mention the fact of corporate bribes to the government and the government getting involved with the corps, by passing laws and regulations to help them out.

I think most of interpreted your question to refer to a stock market in general, not a specific stock exchange since you did not list one (i.e. The New York Stock Exchange). In theory, a stock exchange is useful component of capitalism that allows for businesses to grow and productivity to increase. In practice, here in the United States, problems arise due to government interventions.

*I was going to name government policies that negatively impact the stock market. But as soon after I started, I realized that there are too many to list.

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Bingo you got me yes there is nothing wrong with someone choosing to make their company public, though I wouldn't, but I could change that view since I am still only a child(20). Maybe I jumped to a big conclusion about the stock market and it would work in an objectivist society, but even if the initiation of force was taken away, since not everyone that owns corps are objectivists they will find a way to get their parasitic way, maybe I'm being too cynical, but that is just what I think will happen.

I think you have formulated your opinions rather hastily, and perhaps have fallen for some of the anti-capitalistic rhetoric that the Left loves to employ as part of their class warfare (the rich are evil, corporations are evil, etc.).

As others have pointed out, the stock exchange is merely a bunch of people buying and selling shares. There's simply nothing inherently immoral about that activity, though, as 2046 mentions, specific transactions could be due their content and context.

And yes, we can agree that government interference leads to corruption and irrationality. Working towards eliminating that as much as possible is worthwhile, but you will always have corruption and irrationality, with or without government. It is irrational to think that all of mankind will suddenly change their nature and give up the love of power, or the ability to make stupid choices and decisions. It is highly unlikely we will have an Objectivist society, as it depends upon humans not being humans. It is a good ideal to strive for, though.

The stock market isn't the problem.

Edited by Avila
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I think you have formulated your opinions rather hastily, and perhaps have fallen for some of the anti-capitalistic rhetoric that the Left loves to employ as part of their class warfare (the rich are evil, corporations are evil, etc.).

As others have pointed out, the stock exchange is merely a bunch of people buying and selling shares. There's simply nothing inherently immoral about that activity, though, as 2046 mentions, specific transactions could be due their content and context.

And yes, we can agree that government interference leads to corruption and irrationality. Working towards eliminating that as much as possible is worthwhile, but you will always have corruption and irrationality, with or without government. It is irrational to think that all of mankind will suddenly change their nature and give up the love of power, or the ability to make stupid choices and decisions. It is highly unlikely we will have an Objectivist society, as it depends upon humans not being humans. It is a good ideal to strive for, though.

The stock market isn't the problem.

I think you're right, maybe I did come to the wrong decision. I honestly didn't expect coming out thinking differently, but it seems like I mistakenly took a collectivist stance, without even knowing it even though I hate class warfare and I'm in the under $50000 range(family not me). I may be thinking ideally about an objectivist society, but with the libertarian islands being built, perhaps an Objectivist society is not far behind.

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I think you're right, maybe I did come to the wrong decision. I honestly didn't expect coming out thinking differently, but it seems like I mistakenly took a collectivist stance, without even knowing it even though I hate class warfare and I'm in the under $50000 range(family not me). I may be thinking ideally about an objectivist society, but with the libertarian islands being built, perhaps an Objectivist society is not far behind.

"libertarian islands"? What are those?

This country has a concept of the "common good" built quite strongly into its fabric (which is why we have libraries, the post office, parks, roads, police, etc.) and so is not likely at all to adopt the Objectivist ideal to any great degree. This country has also, since its founding, been a very religious country, so the atheism necessary to Objectivism would likely be unappealing to the majority of Americans (about 86%) who are religious or at least believe in a God. Libertarianism, or at least some degree of it, stands a somewhat better chance. But this is off-topic...

Edited by Avila
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Sergeant343, Businesses need to invest, and so they need money to do so. They either borrow the money or take partners. This way, a bright guy with a good idea can find millions to back him up and make his ideas reality.

As said later on in this thread, my objection was government interference the entire time.

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Am I alone in thinking that the Stock Market is immoral and irrational?

You come on an Objectivist board to say a certain type of market should be abolished? By abolished, don’t you mean by initiation of physical force? Or do you mean people shouldn’t invest in stocks, and you’re going to lead by example?

I think you’ll find most, maybe even all people here will agree that a market for hit men should be abolished, and kiddie porn is probably in the same category. That’s about it, if you’re for Objectivism, you’re for free markets.

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You come on an Objectivist board to say a certain type of market should be abolished? By abolished, don’t you mean by initiation of physical force? Or do you mean people shouldn’t invest in stocks, and you’re going to lead by example?

I think you’ll find most, maybe even all people here will agree that a market for hit men should be abolished, and kiddie porn is probably in the same category. That’s about it, if you’re for Objectivism, you’re for free markets.

It was pointed out again that I jumped to an irrational conclusion. In fact I am now going to say that in the opening topic now.

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Bingo you got me yes there is nothing wrong with someone choosing to make their company public, though I wouldn't, but I could change that view since I am still only a child(20). Maybe I jumped to a big conclusion about the stock market and it would work in an objectivist society, but even if the initiation of force was taken away, since not everyone that owns corps are objectivists they will find a way to get their parasitic way, maybe I'm being too cynical, but that is just what I think will happen.

Above all Objectivism requires you to think for yourself. If your interest in economics rates high on the hierarchy of your plans for your future, you will learn all you can about it. The more you know, the more empowered you will become to see where breakthroughs can be made in human understanding. The parasites only win by default when there is no conscious man to lead toward a better way.

"From the John Gault Speech in Atlas Shrugged: Every form of causeless self-doubt, every feeling of inferiority and secret unworthiness is, in fact, man's hidden dread of his inability to deal with existence. But the greater his terror, the more fiercely he clings to the murderous doctrines that choke him. No man can survive the moment of pronouncing himself irredeemably evil; should he do it, his next moment is insanity or suicide. To escape it - if he's chosen an irrational standard - he will fake, evade, blank out; he will cheat himself of reality, of existence, or happiness, of mind; and he will ultimately cheat himself of self-esteem by struggling to preserve its illusion rather than to risk discovering its lack. To fear to face an issue is to believe that the worst is true. - Ayn Rand
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Above all Objectivism requires you to think for yourself. If your interest in economics rates high on the hierarchy of your plans for your future, you will learn all you can about it. The more you know, the more empowered you will become to see where breakthroughs can be made in human understanding. The parasites only win by default when there is no conscious man to lead toward a better way.

I know I have to think for myself, which is why I believed that to begin with, but since the posters made much better arguments for the stock market and they made more rational sense to me than my first statement, and I won't stick to something that has be proven to me to be irrational. Economics won't being in my job field, so I won't become completely knowledgeable of its inner workings, but I want to learn more, or otherwise remain ignorant.

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