Introduction
* Essay up on NewPolity’s blog: https://newpolity.com/blog/should-christians-invest-in-the-stockmarket
* I wrote essay published in 4.2: https://newpolity.com/single-issues/vol-4-2
* Marc wrote response to me
* Interesting objections from essay in livestream recently put up:
* I’ll address some of that here
* Two part podcast
* First deals with shareholding
* Second deals with trading or speculation
Initial Distinction
* Evil per accidens vs per se
* Per accidens - evil from intention or circumstances
* Giving to poor from pride
* Giving to poor when impoverished
* Per se - evil from its nature
* Adultery is evil from its nature, it can never be done righteously
* These acts are call intrinsically evil and are never to be done
* Importance
* Jacob publicly claimed it is Catholic moral theology that intrinsically evil acts can be done
* Meaning of Catholic Podcast: https://www.youtube.com/live/q8VDT1jbKRA?feature=share&t=3080
* This is false
* It shows in part where Jacob is coming from
* He may not be a reliable witness or interpreter when it comes to moral theology
* Focus of podcast
* Jacob and Marc on per accidens evils
* There are several points made
* Apple buybacks merely to drive up price
* Flippant buying/selling via phones
* This is to say that stock trading can be done better and I agree
* I focus on the per se arguments
* This is the central claim I want to focus on
* If shareholding/stock trading are per se evil, then the other points just merely add fuel to fire
* If it is not per se evil, we can discuss how to trade rightly and how to bring this about
* Shareholding vs. Stock Trading
* Shareholding
* Involves ownership of the business and the rights that accrue to that
* Not necessarily a behavior, but certain behaviors are involved which are worth discussing
* Stock Trading
* The actual buying and selling of shares of companies
* This is certain a behavior that we can clearly discuss
* Shareholding often arises from stock trading and ends with trading, but the two are distinct
The Essay
* Three areas against shareholding
* Proportionate profits
* Dominion of use
* Shareholder responsibility
* Proportionate profit
* The societas
* Medieval contract that goes back to Roman Law
* Various arrangements
* Terminal contracts, sometimes serial
* Silent partnerships
* Profits shared according to how much put in
* Silent partnership could be 75/25
* Place of societas
* Taken as paradigmatic or central
* Dividends are a “radical break”
* Giving up due to proportionate profits is deranged
* An essential difference of structure
* Societas is terminal, profit shared when venture liquidated
* Company not terminal
* Profit need to be treated differently
* Continued growth
* Emergency reserves
* Paid profits
* Growing value of business maybe more valuable than cash payments
* Dominion of use
* The common shareholder does not even have a right to visit the assets of the company. If someone who owns some shares in Ford decides he wants to see the famous assembly lines and walks into the factory, he will not be greeted as a member of the company—rather, he will be dragged out by the security team. There is no proper category for a shareholder who does not work for the company or sit on the board of directors. His claim is ethereal and his ownership does not entail dominion, control, or use of what is owned; there is no metaphysical reality behind his “ownership.”[27]
* This is simply the nature of a partnership
* Sole proprietor may make use of the goods of the business as he pleases
* A partner may not, because the ownership is shared and no longer exclusive
* Example of restaurant
* Shareholder Responsibility
* Here consider both the article and the recent livestream
* Distinguish between authority and responsibility
* Degree of authority
* Shareholders authority is proportionate to the shares they own, how invested they are in the business
* This is not essentially different from partnerships
* Investing more will entail greater authority
* Can invest in smaller companies or invest with others
* Jacob/Marc argue for a qualitative difference
* Authority is extrinsic and isn't a fruit of labor
* This appears problematic
* Through our juridical systems, we have enabled one to lay claim to a possession that he never operates or a property he has never even seen—to call a piece of the earth “his own” without working it. This creates a pretense of ownership in conflict with “the very nature of these means [i.e., capital] and their possession” (Laborem Exercens 65).
* They appear to be saying that labor is not merely primordially the origin of ownership, but exclusively. This would entail the exclusion of exchange as a real mean of obtaining ownership, which is manifestly false. If exchange is, then the one who buys possession or land without working on it is a real owner, not merely a pretense. He has real authority.
* There is no qualitative difference, because shareholders are real owners with shared ownership of the business who have delegated authority to manage the business to the board. This also answers the claim that control and ownership are separated.
* Objection regarding whether shareholder have real authority
* The board of directors is not bound by majority decision of shareholders
* Shareholders with some minimal requirements can put for proposals to be voted on
* The board has to work with SEC to exclude these proposals if there is something wrong
* If majority votes in favor, the board can reject
* Thoughtful person should ask "Why?"
* The board as given delegated authority to manage the business by the shareholders
* The board consequently has a fiduciary responsibility over the business
* Dog Argument
* Fundamentally equivocates authority and responsibility, and moral and legal responsibility
* You are responsible for the dog and you have the authority to act to achieve that responsibility
* The authority may or may not be "activated" or exercised
* If he bites someone, you may or may not do something about it
* You may or may not train, feed, etc. the dog
* You have responsibility regardless.
* There is a moral responsibility over the dog and a legal responsibility
* Not every moral responsibility is enforced in law
* This is no different than stocks
* You have voting rights, right to propose changes, ability to lobby management etc.
* If the company is not acting rightly, you may or may not do any of these
* You have a responsibility to however and this is the USCCB's point
* You have both moral and legal responsibilities, but just because the state doesn't come after you doesn't entail you are not responsible
* Indeed, sometimes shareholders are legally responsible as when the company acts as an "alter ego" of the shareholder
* However, given the shared owners and delegated authority, there is a question to what extent shareholders ought to be held liable
Mutual Funds and USCCB
* Plain reading of the text is that it is referring to shareholders in the company, not mutual fund account holders
* Shareholding and mutual funds account are different
* A shareholder owns a claim against a company with all of the right that accrue to that
* The mutual fund account holder buys a claim against the mutual fund, the mutual fund invests that money
* The amount you invest may not be enough to buy any or all shares invested in the mutual funds
* The cash may indeed sit in the fund for awhile and everyone has a partial claim to it, because they have account value over the whole fund
* Even if this did exclude stock mutual funds, it would not exclude bond mutual funds, so saying it excludes mutual funds as such is misleading
