[Saeko]

A business plan is not a guarantee for a profit. Many businesses with a business plan fail.

Any kind of plan can fail. That's not really saying much. But if the ideology is trying to justify the capitalist's sole right to profit on the basis of his supposedly taking some kind of risk, then the existence of a business plan undermines the factual basis of that justification since business plans minimize risk.

[quetzalcoatl]

The shareholders are the capitalists right? So the financial risk is assumed by shareholders/capitalists.

Anyone that owns their own home is a Capitalist.

No, and no. Personal possessions are not capital. If you use your home as collateral to buy other homes and rent them out, then you may be a capitalist. If you just live in it, no. It is not just a matter of being a stakeholder, it's a matter of having a sufficient amount of power to immunize yourself from the risks of failure. The truly uber-capitalists have not only immunized themselves from the risk of failure, they have immunized themselves from the risk of criminal prosecution. It's quite true that many successful business owners stop short of that, but that is the logic of the pursuit of economic power if you give yourself over to it.

A shareholder is not a capitalist per se. If my pension plan owns 10000 shares of XYZ, that doesn't translate to any political power for me. If I control a majority of shares in a major company, or if I am hedge fund operator controlling major voting blocs of many different corporations, that translates into true economic and political power. That is, the power to walk in to any Senator's office and lay out the conditions under which he will receive re-election funding.

[Nunt]

Any kind of plan can fail. That's not really saying much. But if the ideology is trying to justify the capitalist's sole right to profit on the basis of his supposedly taking some kind of risk, then the existence of a business plan undermines the factual basis of that justification since business plans minimize risk.

I don't see why this would be true. Even if you attempt to minimize risks, this does not mean you are able to eliminate all risks. There will always be risks and it is for that that entrepreneurs get compensated. On the other hand, taking risks is not the only thing for which entrepreneurs are compensated. Minimizing risks by making a good business plan and creating a financially sound firm that has a good chance to succeed is valuable as well. So taking risks as well as avoiding risks is something for which capitalists can be compensated.

I also find it strange that you say "supposedly taking some kind of risk". Is this something that you disagree with? Do you imagine that capital income is somehow guaranteed?

A shareholder is not a capitalist per se. If my pension plan owns 10000 shares of XYZ, that doesn't translate to any political power for me. If I control a majority of shares in a major company, or if I am hedge fund operator controlling major voting blocs of many different corporations, that translates into true economic and political power. That is, the power to walk in to any Senator's office and lay out the conditions under which he will receive re-election funding.

Even if a shareholder does is not a major shareholder, would this not make him a capitalist? I thought capitalists were defined as those who obtain an income from capital without having to work. In fact, if you are just a passive shareholder I would argue that you are an even worse type of capitalist. The active shareholder at least is involved in the strategic decision making of the firm, he must do research, analyze business proposals, go to meetings, monitor the CEO. One could argue that at least the active shareholders exerts some effort that benefits the production and profitability of the firm. Thus, he also gives his labor. Even in a socialist firm, the functions that are performed by the active shareholders would still be performed (maybe by a council of workers instead of the active shareholders).

In contrast, the passive shareholder is the worst kind of capitalist. He just sits there, does absolutely nothing and watches his money create more money. And the worst of the worst is the pensioner. This guy doesn't even bother to choose the firms in which he invests. The only thing he knows is the financial return he obtains without any effort or knowledge.

[Saeko]

I don't see why this would be true. Even if you attempt to minimize risks, this does not mean you are able to eliminate all risks. There will always be risks and it is for that that entrepreneurs get compensated. On the other hand, taking risks is not the only thing for which entrepreneurs are compensated. Minimizing risks by making a good business plan and creating a financially sound firm that has a good chance to succeed is valuable as well. So taking risks as well as avoiding risks is something for which capitalists can be compensated.

So regardless of whether or not a capitalist takes any risk, he ought to own all of the profit? I think you've proved my point. Whether or not a capitalist takes any risk has nothing at all to do with who ought to own the profit the firm generates.

I also find it strange that you say "supposedly taking some kind of risk". Is this something that you disagree with? Do you imagine that capital income is somehow guaranteed?

If you have enough capital, then success is practically guaranteed.

[quetzalcoatl]

Even if a shareholder does is not a major shareholder, would this not make him a capitalist? I thought capitalists were defined as those who obtain an income from capital without having to work. In fact, if you are just a passive shareholder I would argue that you are an even worse type of capitalist. The active shareholder at least is involved in the strategic decision making of the firm, he must do research, analyze business proposals, go to meetings, monitor the CEO. One could argue that at least the active shareholders exerts some effort that benefits the production and profitability of the firm. Thus, he also gives his labor. Even in a socialist firm, the functions that are performed by the active shareholders would still be performed (maybe by a council of workers instead of the active shareholders).

In contrast, the passive shareholder is the worst kind of capitalist. He just sits there, does absolutely nothing and watches his money create more money. And the worst of the worst is the pensioner. This guy doesn't even bother to choose the firms in which he invests. The only thing he knows is the financial return he obtains without any effort or knowledge.

The small-change shareholder functions as a pool from which capitalists draw their funds. These 'shares' are in fact the direct product of his labor - they do not constitute in any way "an income from capital without having to work." They may, under the best circumstances, provide a supplemental income; but they hardly fulfill the criterion of capital that amasses more capital. An ordinary individual with a middling income would not, over the course of a lifetime, be able to amass enough capital to support his retirement through conservative share investing. He is still dependent on a government pension as a part of the total package. It is basically no different from the purchaser of corporate bonds - just because I may own some bonds of XYZ doesn't make me a banker. In fact such a system would be ludicrously unworkable. That's why we have capital and money markets: to function as an interface between capitalists and the public.

[lucky]

The small-change shareholder functions as a pool from which capitalists draw their funds.

Capitalists (aka financiers, investors) provide funds, don't draw on them. Entrepreneurs (aka businessmen, or speculators) draw on funds.

In contrast, the passive shareholder is the worst kind of capitalist. He just sits there, does absolutely nothing and watches his money create more money. And the worst of the worst is the pensioner. This guy doesn't even bother to choose the firms in which he invests. The only thing he knows is the financial return he obtains without any effort or knowledge.

LOL so you're anti-passive-investing now?

[Harmattan]

My question is: Is the Capitalist justified in his thoughts and actions?

Nope. Capitalism is justified when you compare it to other systems (feudalism, communism, mercantilism, etc):

* It is more efficient than everything else and makes us all more wealthy while requiring less work.
* It requires less physical coercion than any other system. It only requires it for property rights enforcement and physical integrity protection. (1)
* It empowers individuals further by clustering power thanks to an increased separation between economics and politics (2), and because the very essence of capitalism requires that no legal privilege exist so that everyone can take initiative. And while theoretically communism could do better, actual communism was worse.
* The elites are less endogenous than previous systems and have a higher turn-over rate. Theoretical communism could do better and actual communism may have done better.

(1) Which does not mean that you should stick to this. I do support an increased taxation for the common welfare and robust social foundations (public schools, "socialized" health system, etc).
(2) Since all democracies are imperfect, it's good that even a democratically elected power does not have the full authority. However this separation of power must be limited, otherwise you end up with an impotent democracy while the true power is now in the hands of a few corporations.

Please take note of nuances and oratory precautions.

Is there really a risk if exploitation is essential for profit making?

Certainly, as can testify the hordes of capitalists who lost everything or are afraid of losing everything because they took personal debts to support their corporations. You should also add the required amount of work: it is common for a corporation founder to work 90h/week for years (and still work more than any of his employees after that). And most of them get nothing in return.

You don't need to resort to the labor theory of value to prove that capitalists don't actually take any risks in any real sense. There are these things called "business plans", things which no business can do without, whose function it is to guarantee investors a profit.

Thanks for the great laugh!

FYI 100% of startups had a business plan but 9 out of 10 failed. For the start a business plan is not at all about prediction, it is an analysis of the market. You can quite confidently predict a fast food's success for a large brand whose products and demographics are well-known but doing so for a start-up is meaningless.

But even for the well-known fast-food brand, please realize that most of businesses have a 10% profit rate. Which means that anything that decreases their sales by just 10% put them in the red. A bad manager, an unexpected competitor, a new commercial area two kilometers away, a mistake in the attempt to understand the complex local demographics, etc. Let's not even mention corporations that have to constantly innovate: they can be take a wrong direction for one cycle, maybe two, not three.

So regardless of whether or not a capitalist takes any risk, he ought to own all of the profit?

For the start the profit is what's left once you paid everyone, including your employees. And the profit is mostly reinvested in the corporation. What's left for the owner is:
* His salary.
* His dividends.
* The enterprise's value the day he sells it (including through stocks market).

Now is it fair that some gets 100 times more than others? No. But alternatives experimented so far are worse.

If you have enough capital, then success is practically guaranteed.

Sure, this is why we all have Microsoft cars, why we are all subscribers of Teledesic, why MSNBC is the first TV channel, etc. And those big failures are just for Microsoft, but believe me all large corporations have such great failures.

First of all there is a little something called "competition". And believe me they're not nice guys with you.

[Saeko]

Thanks for the great laugh!

FYI 100% of startups had a business plan but 9 out of 10 failed. For the start a business plan is not at all about prediction, it is an analysis of the market. You can quite confidently predict a fast food's success for a large brand whose products and demographics are well-known but doing so for a start-up is meaningless.

But even for the well-known fast-food brand, please realize that most of businesses have a 10% profit rate. Which means that anything that decreases their sales by just 10% put them in the red. A bad manager, an unexpected competitor, a new commercial area two kilometers away, a mistake in the attempt to understand the complex local demographics, etc. Let's not even mention corporations that have to constantly innovate: they can be take a wrong direction for one cycle, maybe two, not three.

If those startups thought they had a 90% chance of failure they would never have gone into business in the first place. The reason that they did was obviously because they thought they had a very good chance of being the next big thing which means none of them expected to actually lose anything. Of the 10% that did succeed, presumably not just by sheer dumb luck, that means that they must have had a very solid strategy that eliminated any actual potential for failure.

And going into the red doesn't mean your business fails, it just means you take on more debt.

For the start the profit is what's left once you paid everyone, including your employees. And the profit is mostly reinvested in the corporation. What's left for the owner is:
* His salary.
* His dividends.
* The enterprise's value the day he sells it (including through stocks market).

Now is it fair that some gets 100 times more than others? No. But alternatives experimented so far are worse.

What the alternatives are and whether or not they are worse is irrelevant, my point is that the supposed risk-taking justification for a capitalist's ownership of of the firm is nonsense on two fronts. The first is that the assertion that capitalists take risks is false. And the second is that the syllogism "I risk losing x, therefore I ought to own it" is a non-sequitur anyway.

Sure, this is why we all have Microsoft cars, why we are all subscribers of Teledesic, why MSNBC is the first TV channel, etc. And those big failures are just for Microsoft, but believe me all large corporations have such great failures.

First of all there is a little something called "competition". And believe me they're not nice guys with you.

That Microsoft is still around despite those epic failures proves my point. They have a crap-ton of capital to absorb the losses these failures incurred, and so none of them was enough to actually bring the company down.

[lucky]

Investors are compensated with a return for lending the capital. It's not primarily a payment for risk transfer (that would be "insurance" not investment), it's a payment for getting to use the money. If risk is involved you gotta pay a premium return, but the riskless rate is not 0 either.

[ComradeTim]

Nope. Capitalism is justified when you compare it to other systems (feudalism, communism, mercantilism, etc)... But alternatives experimented so far are worse.

This is what the capitalist argument essentially boils down to "Yes it is unequal, yes, it is exploitive but no-one has come up with anything better". However, this simply untrue. There is a system which is far more productive, efficient and democratic, Libertarian Socialism. This systems superiority is best shown by analysis of it's most famous and widespread use, in Anarcho-syndicalist Spain (1936-39).

"In Spain, during almost three years, despite a civil war that took a million lives, despite the opposition of the political parties . . . this idea of libertarian communism was put into effect. Very quickly more than 60% of the land was collectively cultivated by the peasants themselves, without landlords, without bosses, and without instituting capitalist competition to spur production. In almost all the industries, factories, mills, workshops, transportation services, public services, and utilities, the rank and file workers, their revolutionary committees, and their syndicates reorganised and administered production, distribution, and public services without capitalists, high-salaried managers, or the authority of the state.

"Even more: the various agrarian and industrial collectives immediately instituted economic equality in accordance with the essential principle of communism, 'From each according to his ability and to each according to his needs.' They coordinated their efforts through free association in whole regions, created new wealth, increased production (especially in agriculture), built more schools, and bettered public services. They instituted not bourgeois formal democracy but genuine grass roots functional libertarian democracy, where each individual participated directly in the revolutionary reorganisation of social life. They replaced the war between men, 'survival of the fittest,' by the universal practice of mutual aid, and replaced rivalry by the principle of solidarity . . .

"This experience, in which about eight million people directly or indirectly participated, opened a new way of life to those who sought an alternative to anti-social capitalism on the one hand, and totalitarian state bogus socialism on the other."


The socialisation of health services was one of the greatest achievements of the revolution. To appreciate the efforts of our comrades it must be borne in mind that the rehabilitated the health service in all of Catalonia in so short a time after July 19th. The revolution could count on the co-operation of a number of dedicated doctors whose ambition was not to accumulate wealth but to serve the afflicted and the underprivileged.

"The Health Workers' Union was founded in September, 1936. In line with the tendency to unite all the different classifications, trades, and services serving a given industry, all health workers, from porters to doctors and administrators, were organised into one big union of health workers . . ."

...Every factory elected its administrative committee composed of its most capable workers. Depending on the size of the factory, the function of these committees included inner plant organisation, statistics, finance, correspondence, and relations with other factories and with the community . . . Several months after collectivisation the textile industry of Barcelona was in far better shape than under capitalist management. Here was yet another example to show that grass roots socialism from below does not destroy initiative. Greed is not the only motivation in human relations."

"In distribution the collectives' co-operatives eliminated middlemen, small merchants, wholesalers, and profiteers, thus greatly reducing consumer prices. The collectives eliminated most of the parasitic elements from rural life, and would have wiped them out altogether if they were not protected by corrupt officials and by the political parties. Non-collectivised areas benefited indirectly from the lower prices as well as from free services often rendered by the collectives (laundries, cinemas, schools, barber and beauty parlours, etc.)."

[SolarCross]

There is a system which is far more productive, efficient and democratic, Libertarian Socialism. This systems superiority is best shown by analysis of it's most famous and widespread use, in Anarcho-syndicalist Spain (1936-39).

Well capitalism is just great, if you have something even better, then wow! I'll be very pleased to be your first customer, now where would I go to sample your services / merchandise?

[quetzalcoatl]

Capitalists (aka financiers, investors) provide funds, don't draw on them. Entrepreneurs (aka businessmen, or speculators) draw on funds.

Entrepreneurs, except in unusual cases, do not draw directly on funds from the public. Financiers provide funds to entrepreneurs, but do not risk their own money. They draw on funds provided by individual investors, mutual funds, pension plans, and such.

Financial risk, however, is not the only metric for assessing risk. There are many other risks. Take environmental risk for one. Mining companies raze the tops of mountains, and dump the tailings into streams. There is a minimal cleanup required by law and regulation. The rest of the cost of cleanup is assumed by the taxpayers. This is a part of the 'socialization of risk and privatization of profit' system. Fracking involves a massive co-optation of common water supplies that often leaves municipalities and farmers out in the cold. The destruction of farm-to-market roads by massive fracking trucks is so extreme that many counties have been forced to literally give up on fixing them; taxpayers simply cannon afford the cost. Attempts to collect damages are met with polite incredulity or laughter.

There are other modes for eliminating risk if you have the political power. States in the US have enacted unnecessary "driver responsibility" laws, an ingenious scam to extract thousands of dollars from individuals on behalf of private insurance carriers.

[Harmattan]

There is a system which is far more productive, efficient and democratic, Libertarian Socialism. This systems superiority is best shown by analysis of it's most famous and widespread use, in Anarcho-syndicalist Spain (1936-39).

I am not familiar with this period. I will investigate it by sheer curiosity.

But, really, if this system is that efficient, why doesn't it propagate? After all nothing prohibits it, as far as I understand it can work at a local scale (no national system shift required), it can fit in a capitalist system without any problem and there are enough of small and medium enterprises that are already owned by their workers. So?

If those startups thought they had a 90% chance of failure they would never have gone into business in the first place. The reason that they did was obviously because they thought they had a very good chance of being the next big thing which means none of them expected to actually lose anything.

Even if the founders had been unable to evaluate their risks this would not erase the risk. And your argument was that there is no risk.

Second of all you hold simplistic views: in your eyes all founders are just blind people dreaming of some get-rich-quick scheme. You're so focused on wealth that you're totally neglecting the human factors:

• The common point of all entrepreneurs is a strong will of independence. This is the most striking feature: they want to work for themselves and not be bossed around.
• Then comes the creation act: you're birthing something, you're inventing something, this is *your* baby, and for many founders this baby is something that passionates them.
• You're not just another wage drone in the boring cogs, you're the moving center of a world in construction. You won't wake up every morning at the same hour for forty years; instead you don't even know what you will do in five years but your life will be different for sure.
• There is the thrill, the adrenaline, the fact that you risk something, the fact that it may become big (I am not even talking about money, merely ego). Sure, the daily reality is more monotonous than this but there are still those phone calls and mails that twist your fate in an instant.
• You can dream, and I mean plausible dreams, this is more than many people can say. 1 out of 10 is still better than the odds of winning the lottery. And this only requires you to make a blood pact with a banker.
• Then there is the ego, the power, and other social phalluses.

Money is not the cake, it's the ice on the cake. Do you really think those people do work 90h/week because they hope to get a bigger house?! Most of them know that staying in big random corp #48464 is a safer bet (most of them already enjoy six digits yearly payrolls + advantages). Believe me, they're all very much aware of the risks, they simply hope that their bet will not become bigger than the few years of their life and the savings and the moderate loan they initially put on the table. Unfortunately many entrepreneurs end up supporting their baby by endorsing larger personal loans and engaging their house, even if they initially hoped they would not have to. Sometimes it work. Sometimes it does not and their house is seized.

Now I fully admit that I am partial given my own position since I crossed that line myself.

The first is that the assertion that capitalists take risks is false.

This is denial.

That Microsoft is still around despite those epic failures proves my point. They have a crap-ton of capital to absorb the losses these failures incurred, and so none of them was enough to actually bring the company down.

"I am wrong, therefore I am right."

the supposed risk-taking justification for a capitalist's ownership

But this premise is wrong. Those people are allowed to own their corporations because at no point they had to threaten other people or strike them with maces, period. Since they didn't trespass on others' freedom, they're legally allowed to own what they created, period. So the justification is indeed that this system does not require physical coercion, promotes large freedom and no legal privileges, and that it works.

The story does not end there, but this is fair enough. It's not ideal, I hope we will improve it with more automation and an universal income (and other social mechanisms if your country does not have them). But right now it does not involve cutting the neighbor village/country's throats and this makes it better than everything else we tried before.

Entrepreneurs, except in unusual cases, do not draw directly on funds from the public. Financiers provide funds to entrepreneurs, but do not risk their own money. They draw on funds provided by individual investors, mutual funds, pension plans, and such.

Institutional investors are of course present but they're far to be the only kind of investors. There are many individual investors, period.
And actually few institutional investors are interested by start-ups.

[Saeko]

Even if the founders had been unable to evaluate their risks this would not erase the risk. And your argument was that there is no risk.

There is a "risk", however small, that by tying my shoes I could accidentally trigger a chain of events that would start a nuclear war. In theory, nothing can eliminate this risk, but in practice the risk is so small that we can assume that it doesn't exist.

Second of all you hold simplistic views: in your eyes all founders are just blind people dreaming of some get-rich-quick scheme. You're so focused on wealth that you're totally neglecting the human factors:

• The common point of all entrepreneurs is a strong will of independence. This is the most striking feature: they want to work for themselves and not be bossed around.
• Then comes the creation act: you're birthing something, you're inventing something, this is *your* baby, and for many founders this baby is something that passionates them.
• You're not just another wage drone in the boring cogs, you're the moving center of a world in construction. You won't wake up every morning at the same hour for forty years; instead you don't even know what you will do in five years but your life will be different for sure.
• There is the thrill, the adrenaline, the fact that you risk something, the fact that it may become big (I am not even talking about money, merely ego). Sure, the daily reality is more monotonous than this but there are still those phone calls and mails that twist your fate in an instant.
• You can dream, and I mean plausible dreams, this is more than many people can say. 1 out of 10 is still better than the odds of winning the lottery. And this only requires you to make a blood pact with a banker.
• Then there is the ego, the power, and other social phalluses.

Money is not the cake, it's the ice on the cake. Do you really think those people do work 90h/week because they hope to get a bigger house?! Most of them know that staying in big random corp #48464 is a safer bet (most of them already enjoy six digits yearly payrolls + advantages). Believe me, they're all very much aware of the risks, they simply hope that their bet will not become bigger than the few years of their life and the savings and the moderate loan they initially put on the table. Unfortunately many entrepreneurs end up supporting their baby by endorsing larger personal loans and engaging their house, even if they initially hoped they would not have to. Sometimes it work. Sometimes it does not and their house is seized.

Now I fully admit that I am partial given my own position since I crossed that line myself.

You are assuming way too much about what I think, first of all. Secondly, none of this addresses any of the points I actually made. Finally, mere mythologizing can in no way substitute for an actual argument and I don't see how any of this supports your position at all.

"I am wrong, therefore I am right."

"A clever saying proves nothing."

But this premise is wrong. Those people are allowed to own their corporations because at no point they had to threaten other people or strike them with maces, period. Since they didn't trespass on others' freedom, they're legally allowed to own what they created, period. So the justification is indeed that this system does not require physical coercion, promotes large freedom and no legal privileges, and that it works.

The story does not end there, but this is fair enough. It's not ideal, I hope we will improve it with more automation and an universal income (and other social mechanisms if your country does not have them). But right now it does not involve cutting the neighbor village/country's throats and this makes it better than everything else we tried before.

That's just plain false. Private property cannot exist outside of the legal framework built and enforced (often by violent means) by the state.

Even if we assume that it is the case that some property was acquired by non-violent means, it still does not logically follow that they should own it.

[lucky]

Financiers provide funds to entrepreneurs, but do not risk their own money. They draw on funds provided by individual investors, mutual funds, pension plans, and such.

This doesn't make sense. The individual investor, mutual fund or pension plan is the investor when they invest money into a business and they very much use their own money. I don't know what "financier" you have in mind that draws on these funds.

[Crantag]

Financiers provide funds to entrepreneurs, but do not risk their own money. They draw on funds provided by individual investors, mutual funds, pension plans, and such.

This doesn't make sense. The individual investor, mutual fund or pension plan is the investor when they invest money into a business and they very much use their own money. I don't know what "financier" you have in mind that draws on these funds.

The financier (i.e. fund manager) in such cases is in the role of intermediary. That is, they are the middle men. They don't 'invest' their own money. They invest other people's money. What they provide is access to financial markets. They profit through fees and commissions principally (in principle).

Major financial companies (as well as non-financial companies flush with cash, these days) also do trade on their own accounts. This is a significant activity, but is distinct from the activity of fund managers (insofar as they are acting in the role of fund manager). To this extent, the risk is deferred to the retail investor. If the fund manager loses the house, their reputation might suffer, but they are not liable for the loss.

[lucky]

^ We were talking about "capitalists". Fund managers are not capitalists. They are wage workers. Unless they happen to also invest their own money on the side. In their capacity as fund managers they are not acting as capitalists. The people whose money they manage are capitalists.

[Nunt]

So regardless of whether or not a capitalist takes any risk, he ought to own all of the profit? I think you've proved my point. Whether or not a capitalist takes any risk has nothing at all to do with who ought to own the profit the firm generates.

Taking risk is part of the reason why a capital provider gets profit, not the only reason. If the risk is reduced, then usually expected profits are reduced.
As I said before, creating a good business plan and reducing risk may also warrant compensation. If the capital provider does this, then he also performs an entrepreneurial function for which he can be compensated.
Finally, let's not forget that not all capital provider take risk in the same way and are compensated in the same way. If you only loan money to a firm instead of buying stock, then your compensation is a fixed interest rate independent of profits. Just like the employees' fixed wages.

The shareholders are the 'residual claimants' of the firm. They get whatever is left over after all contractual obligations are filled (paying employees, paying interests, paying suppliers). Whatever is left fluctuates from year to year and from firm to firm. That is why we consider people who are compensated through contractual obligations as taking relatively little risk (an employee knows exactly how much he will be payed per hour) and the people who are compensated with the residual income as taking more risks. Do you think many employees would prefer to be payed according to the residual income of the firm? If times are good your wages are high, if times are bad you get nothing, if times are very bad you pay money to the firm. As an exploited employee myself, I'd rather have a fixed income (that may be lower than average profits) and have someone else take the risks for me than to take the risks myself.

Shareholder compensation can be warranted by the following things:
-taking risks: having a variable income while others within the firm have a fixed income
-time preferences: money today is worth more than money tomorrow. If your money is invested in a firm, you can't consume it, you can't invest it somewhere else
-entrepreneurial services: making business plans etc.

[Crantag]

^ We were talking about "capitalists". Fund managers are not capitalists. They are wage workers. Unless they happen to also invest their own money on the side. In their capacity as fund managers they are not acting as capitalists. The people whose money they manage are capitalists.

Fund managers are not wage workers. Not by a long shot.

Their personal finances aside, what they are is social parasites.

They control access to capital markets. They profit off of commissions and fees on account of this access.

In terms of their social position, they are the proprietors of monopoly finance capital.

I was responding to the point of whether they utilized other people's money, a situation which you denied, but which you were wrong to deny.

[Nunt]

Fund managers are not wage workers. Not by a long shot.

Their personal finances aside, what they are is social parasites.

They control access to capital markets. They profit off of commissions and fees on account of this access.

In terms of their social position, they are the proprietors of monopoly finance capital.

I was responding to the point of whether they utilized other people's money, a situation which you denied, but which you were wrong to deny.

A fund manager is not a capalist. A capitalist has to own the means of production. Fund managers merely manage financial reserves, they don't own the capital they manage nor do they own any means of production. They are paid in wages. Additionally, a capitalist gains his income by employing workers and uses his ownership of the means of production to extract a surplus from those workers. The fund manager neither owns the means of production, nor employs workers nor extracts a surplus.

Just because you do not like a certain job and the job just happens to be related to capital markets does not make the person a capitalist.

Sure they further the interests of the real capitalists, but then again, doesn't every paid worker? Why does a fund manager who sells his soul to the capitalist deserve your scorn more than any other laborer. They're all cogs in the system. Equally guilty.