A bit confused by this - you're now not actually buying anything that produces anything. I guess you could argue it produces more money, but you have no control over those things - you can only choose what you invest in, but have no control over how those things perform. Otherwise then savings is owning the means of production, given that you're still making money with it.
>A bit confused by this - you're now not actually buying anything that produces anything.
I suggest you look up what stock ownership means. Most wealthy people only own non-controlling interest in most of their investments as well. If you own a share of stock, you own part of the means of production.
> I suggest you look up what stock ownership means.
Stock ownership traditionally means partial ownership of a business.
Except that you almost have no decision making power unless you own a lot of stocks, and that's not going to happen while working a simple middle class job.
It also doesn't mean that the company will pay you a portion of their profits. It is entirely up to the company whether they want to pay you a portion of their profits.
So you own something, but have absolutely no rights to the profits and practically no decision making power. In the spirit of the usual definition of "owning" something, you do not own anything with stocks.
My portfolio works for me 24x7, doesn't complain, doesn't send annoying emails, bother me after hours with an "emergency", or cause loss of sleep. I am highly diversified with index funds. You want to "own a lot of stocks"? Start a small business. Your stock starts off worth nothing, and probably stays that way.
> So you own something, but have absolutely no rights to the profits and practically no decision making power. In the spirit of the usual definition of "owning" something, you do not own anything with stocks.
I would disagree.
I can sell those stocks I own and (hopefully) get more money than I paid for them. Sometimes they pay me a dividend too (share of profits). Sounds like ownership to me. I don't care about decision making power within the company. I LIKE that I have delegated that responsibility.
If you don't, and your reasoning above is the reason why, I strongly recommend you reconsider. There is more to be lost by fearing your lack of control and failing to invest than there is by investing, in say, index funds.
You're the second or third person assuming I'm advocating against stocks. Why do people keep assuming this from my comment? Nothing in my statement suggests owning stocks is a bad idea.
I own stocks. My wealth portfolio is high in stocks. This has little bearing on my comment. I'm not recommending against stocks - in the US I've not found a better investment (real estate is worse).
I'm simply pointing out that the notion of ownership in a company via stocks is very different from what most people imagine. You own almost nothing, and you have virtually no control over the means of production.
Your point is? a lot of the USA's railroads where funded by Investment trusts based in London and Edinburg which had small middle class investors going back to the 19th century.
The point is that if you want to "own the means of production", as was discussed somewhere above, buying stocks as a middle class investor is not going to get you there.
By that notion, most wealthy people do not own the means of production either. There are billionaires from hedge funds that own no controlling interest in any companies.
I understand what a classic stock was - it just seems so abstracted now, it doesn't feel like it's an equivalent. You aren't sharing in the companies success directly, but now there's layers of abstraction and speculation and gamification that it appears that stock success is only tangentially related to company success.
You own companies (stock) that produce things. It is true you have no active involvement or control over the business itself (unless you reach activist investor levels), but this is often a positive thing.
You own a portion of a company, but that portion can be watered down at any time, no? Can't a company produce more shares and disseminate them at any time? I know that conceptually you own a portion, but it's so watered down and abstracted it seems like a far cry from actually owning anything that actually correlates to an actual means of production.
1. You are not entitled to any of the profits of the company by owning stock. Not even if you own preferred stock.
2. You have virtually no control over decisions the company makes. And your vote may not count as much as someone else who has the same number of shares as you. Furthermore, you can have no voting privileges at all as well while owning stocks.
3. A company can devalue the shares you own by simply issuing more (similar to governments printing money).
Not only is all this legal, this is normal. For the average person, the only real reason to own shares is to hope the value goes up. In a few cases it is to get dividends from the companies that have a track record of paying out, but the RoR is not particularly good.
If you buy one share of Toyota Motor Company, you are now a part-owner of a car company, including all the factories and equipment and supply contracts and whatnot that such a thing entails. Owning stock literally entails “owning the means of production”. Buy some stock today and become an evil capitalist!
> If you buy one share of Toyota Motor Company, you are now a part-owner of a car company, including all the factories and equipment and supply contracts and whatnot that such a thing entails.
Assuming this is not specific to Toyota, what does "owning" mean?
If I own one share of a company, it's incredibly rare that I have any say on any of the things you listed above. I usually do not get to vote on those. I also do not have any rights to the profits (in the US, but I doubt this is US specific). So in what sense do I own it other than the company writing me a piece of paper stating I do?
I mean, if I'm part of a joint venture with others to own a 100 unit apartment complex, I would expect to get some of the profit, at least. Likely about as much as my ownership stake. Shares do not guarantee this. A company can be very profitable, and just keep the money and pay you nothing, saying that "we think the value of the stock will go up and you can get paid that way."
I'm not anti-stocks or anything - I own plenty of them. But people should understand what they are and what they are not. And for most English uses of the word "own", it is not ownership.
> I mean, if I'm part of a joint venture with others to own a 100 unit apartment complex, I would expect to get some of the profit, at least. Likely about as much as my ownership stake.
It's the same thing, just on a different scale. If you own, say, one share of VTSAX (Vanguard Total Market Index) you now own, by proxy, 1.8% of one share of Microsoft stock. You don't have any direct voting or economic rights but because of the way a mutual fund is structured you get most of the economic benefit of that fraction of a share. I.e. you get the benefit of most of the capital gain and dividends that it distributes.
I would personally say that if you want to actually "own the means of production" then directly owning shares is the way to go, but if you don't actually care about making decisions for specific companies then you get most of the benefits without any of the day-to-day thought and worry by owning shares in a mutual fund.
I still don't know how that equates to actual ownership of anything - it seems like an incredibly abstract form of ownership, as you get no power, don't share in the profits (if you don't get dividends you only get cash if you sell, that price being only vaguely linked to the current success of the company), and can have your ownership watered down at any time. You own the stock, but that seems incredibly distant from any "means of production".
Yeah it’s pretty abstract. One correction, you definitely do get the dividends that a company pays if you own them through a mutual fund. Funds report their net asset value (NAV) every night and when a company pays dividends it raises the fund’s NAV. US funds are required to pay out dividends to their shareholders as part of their tax status (basically a very specific type of non-profit).
