Wednesday 4 April 2012

Local Shareholders

It is always dangerous to make generalizations, especially so on a blog but I’ll stick my neck out and say that most people who get involved in Transition pretty soon come to the conclusion that a lot of our environmental problems are a consequence of an economic system that does not meet the needs of the majority. Too many people are employed in unfulfilling occupations to earn money to pay for things that they don’t need and taxes to fund government services that in a better structured society would not be necessary. This week, the blog is considering how Local Currencies can change that.

Whilst I do my best to support local businesses (and have just started a village directory on the PC website to promote local services) I’d feel a bit hypocritical if I made a strong case for local currencies as I have 3 clients in Australia ( serviced via the Internet and not by flying there, I hasten to add!). I don’t think that I’d manage to run a software business in rural Norfolk if I relied totally on locally generated wealth. So I’m going to propose a different route to achieve the aims that Chis outlined on Monday.

Local shareholders. A word very often used in conjunction with shareholders is - ‘greedy’.  Shareholders are often pilloried in the press as faceless tycoons who force companies to pillage the environment in the search for profits at any cost. But it has not always been like that. Shareholders - and banks - used to invest local money  in local businesses and perform a useful function in enabling people to raise the funds to create the services that their local communities needed. Shareholders were often given incentives to use the business they invested in and of course shared in any profits, so would do their best to promote the business. Somehow the march of globalization has distorted this process and has led to speculation, asset stripping and a host of other abuses.

A variant on shareholding was the co-operative movement, which was much more prominent in my youth but has been trampled underfoot by the better promotion of competitors. I wonder how many people still collect a ‘divi’ from the CoOp or even know why CoOps are called CoOps!

Last year, some of us made an attempt to purchase a co-operatively owned woodland in order to produce firewood for our own use – but woods don’t come cheap! Maybe we need to widen the net a bit and get back to the roots of shareholding in order to raise the funds to create genuinely useful local businesses.

1 comment:

  1. Totally agree with this, John! I was thinking something fairly similar recently surrounding corporate law. When a company commits a crime, it seems that the effect is that someone gets fired, the company gets fined a pitifully small amount that hardly dents their profit, and all returns to normal. Solution: allow courts to confiscate shares from the shareholders in the company, then selling them to someone more responsible to pay for damages. This way, those who invest in bad companies would think twice, and start to actually care whether their companies commit crimes or not!