Re: AUT: Re: Immeasurable value

[Doug Henwood <dhenwood@xxxxxxxxx>]

Harry M. Cleaver wrote:

>Paper assets are no more fictitious than paper money if they represent
>real assets.

I don't like reading Marx as scripture, but to him, paper money was
fictitious: "Even assuming that the form in which loan capital exists
is exclusively that of real money, gold or silver - the commodity
whose substance serves as a measure of value - a large portion of
this money-capital is always necessarily purely fictitious, that is,
a title to value - just as paper money."
<http://www.marxists.org/archive/marx/works/1894-c3/ch32.htm>.

>You overstate I think. Ownership of 100% of a company's stock (actually
>far, far less than that) gives ownership/control of a company and its
>assets/real-capital does it not?

Far less can give control, yes, but for smaller amounts the situation
is more ambiguous. Stocks are residual claims; if a firm is
liquidated, they're at the back of the line, after all the creditors
are paid off. Under U.S. law, in return for limits on their liability
(they can see the value of their stock wiped out, but the rest of
their assets can't be attached), shareholders give up the right to
dispose of corporate property on their own; they can sell the shares,
but not the firm's assets. Groups of shareholders can band together
and try to change the managers, but that's easier said than done.
Much of U.S. financial history over the last 20 years has been about
trying to increase the power of shareholders - yet still Ken Lay
fleeced 'em.

The real reason people buy stocks is because they're claims to a
profit stream, which is then capitalized. So we're back at the quote
at the top - shares are titles to value, but not "value" itself. Now
we can play some interesting games about how some kind of money are
realer than others - there are good reasons why gold has been the
form of money par excellence over time, but it's still a social
convention.

Doug


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