Corporate profits

It's fashionable these days to knock corporations, in the same way as it was for Britons to knock the EU back in 2016. It wasn't perfect (it still isn't!) but it didn't actually do them any harm. The monarchy is far from perfect but even though I won't be watching the coronation, I consider a King Charles III vastly preferable to a President Boris. 

It's the same when it comes to capitalism. A quick scroll down my Twitter timeline shows that the corporate world is beset by enemies on the left and on the right.

Corporate profits! Corporate greed! CEOs' pay! Privatisation was a mistake! World Economic Forum! New World Order! 5G! Vaccine scam!

The voices of the radical left and radical right fail to see that, in the absence of any viable alternative economic model, trashing what we currently have makes no sense. "Smash the System!" they will yell. But other than offering the discredited dogmas of Karl Marx (who could never imagine workers as consumers or shareholders) or ideas that don't work at scale (imagine a workers' cooperative trying to introduce the smartphone or an oncology drug), or a totally unregulated free-for-all, they have no practical answer. Only ideology.

Corporate greed is seen as the root cause of the world's woes, and critics anthropomorphise corporations as high-net-worth individuals who own all the shares. 

Except they don't.

The vast majority of shares traded on the world's equities market do not belong to shadowy plutocrats. In the UK, only 13% of shares are owned by individual shareholders. And most of those don't own three yachts, a private jet and their own island! Many would have bought shares at the time of Margaret Thatcher's privatisations - I certainly did. The biggest chunk (over a third) represents pension funds. Banks make up a significant chunk too - if you have an ISA, for example, a part of that pot will be invested in the stock market. The bond market is similarly invested in (indirectly) by individuals, be it bank savers or people with money in private or corporate pension funds. So rants against corporate profits and corporate greed are misdirected. I'm surprised by how many of those ranting against corporations are actually financially invested in them without even being aware of that fact or interested or curious as to how that happens - or taking up cudgels as shareholders at annual general meetings.

Shareholder activism and consumer boycotts are powerful tools for those who seek change, understanding that reform is better than revolution. Pressure also needs to be put on politicians to regulate the market more equitably. The pumping of raw sewage into Britain's rivers and coastal waters is inexcusable - but a consequence of Brexit (the relevant EU Directive no longer applies). If you want higher environmental standards, make it an issue for the ballot box, but don't try to bring down the entire economy!

The regulated free market is the least-bad economic system there is; the only debate should focus about regulation, not about smashing the system. But that's fiddly. It requires knowledge and wisdom - tighten the screws here, raise taxes there, loosen some laws here, stimulate some supply or some demand there. 

And this is where it gets tricky. The electorate doesn't like big tricky issues. We're not talking about dilemmas or trilemmas, but massive, complicated, multidimensional problems that cannot be resolved at a single stroke. Look at Brexit. One vote, one decision, Article 50 triggered - consequence - economic growth stopped for a generation.

The economy is highly complex. It does need to be well regulated, but not smashed into pieces for the sake of ideology.

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