[Last month I identified the modern day tyrants as the traders and speculators in the financial markets – those who add no value whatsoever other than generating profit for themselves.This article has been adapted from an article titled “Who Are the Modern Day “Tyrants”? published in the June 2002 issue of my monthly newsletter. This month I will complete my thoughts]
Thomas Paine
These modern day tyrants value short-term financial gratification more than anything else. Their actions are totally inconsistent with a sustainable world in which people are values and life is affirmed. They create no real value in the world, certainly not in the way most of us think about adding value, such as an exchange of something for something else. Their sole purpose is to make a profit, and to do so with the least amount of capital as possible. They do not invest in companies. None of their cash ever owns a stock or allows any company to expand. None of their cash ever creates jobs. They have no loyalty to any cause or group of people (unless it is their own staffs).
Like it or not, traders are driving the “train of capitalism” – the most dominant economic system in the world. CEOs, directors, executives with vested stock and holding options, investment bankers, brokers, and investors of all sizes are merely passengers on this “train” which traders are driving faster and faster. No longer is it sufficient to own a good sound investment in a company that is producing a decent product. These players require minute-by-minute stock evaluations which drive their decisions (often programmed by computer) which in turn has all the rest of us jumping through hoops. CEOs, directors and major investors sometimes think they are in control but the people most influential in this craziness – those who are really pulling the strings and manipulating stock values – are the growing cadre of day traders who are taking bigger and bigger profits in larger and larger numbers in shorter and shorter timeframes.
How many decisions to remain dependent on Middle East oil are influenced by stock values in publicly-traded companies? How many third world cultures have been violated and how many non-industrialized people have been MacDonaldized because of corporate-wide drivers to maintain stock price? How many traditions have been trampled so more growth can be documented in the annual report? How many weapons need to be sold in order to maintain quarterly projections?
How many lobbyists are needed to purchase special tax breaks so stock value will be enhanced? How many short cuts are taken in manufacturing and ethics to save money and increase earnings in order to maintain optimism on The Street?
How many natural treasures are sacrificed in order to enhance projections for future earnings and, therefore, a better price today? How many children are forced into near-slavery conditions so a trader in Manhattan can make an extra million in one day?
I don’t mean to imply that traders are consciously doing something malicious. But they are having a huge negative impact on the rest of us. What is worse is that they are seemingly oblivious to it. What could be even worse yet is that they are not oblivious and simply don’t care!
The time is here for all of us – traders, doctors, merchants, consumers and teachers – to be responsible for our choices and accountable for our actions.
Few people realize that the “economy” that most of us think about (the exchange of real goods and services) is a mere fraction of the amount of financial transactions taking place in the world every day. More than 90% of the world’s economic activity has nothing at all to do with any exchange of value; it is all about trading – betting on fluctuations and making huge fortunes as quickly as possible. The economy that most of us are part of could be compared to the vending machines income as a part of the total gross revenues of a Las Vegas gambling casino. It is part of the total revenue but a very small part.
Like the kings and queens in centuries past, traders are simply going about their lives taking their nobility for granted – oblivious to any negative impact they might be having in the world. But if you accept that we all have impact on each other – and that we have some impact even if we sit in our room every day and “do” nothing – then what is the impact these traders have on the rest of the world, particularly those in other parts of the world, who are so heavily influenced by American capitalism?
Some time back, I saw an infomercial on television that was pitching a system which you could purchase and become an overnight stock trader! Doesn’t this suggest that we are rapidly becoming a society of traders instead of investors? So who has to work anymore? Let’s just sit home and trade all day! There’s no sense working at a job making something that people could use to better their lives. There’s no need to leave the house and sweat for a living building a house or providing a service that people might require. Let’s make a few trades and make a ton of money sitting on the couch. Hey, who needs to work anyway?
[NOTE: John recommends The Divine Right of Capital, by Marjorie Kelly (Berrett-Koehler, 2001)]
Speaking with a colleague the other day, he argues that day-traders do create value...they create liquidity for the investors/speculators. Seems like that's only a real advantage for other traders not society at large though. Other thoughts?
Posted by: johnrenesch | July 07, 2013 at 03:10 PM