Like it or not, we are all shareholders now

Paul Sheehan contends that Like it or not, we are all shareholders now

... According to the Australian Stock Exchange, the market's value was equivalent to 102 per cent of gross domestic product on December 31. The market has moved onwards and upwards since then, enough to place Australia in the top 10 of global stock markets, even though Australia ranks only 42nd among nations by population, and 15th by size of economy. We've become a nation of shareholders, one of the leading stocked-up nations in the world.

In a single generation, Australia has evolved from a nation where a large number of people invested in various forms of mutual societies to a nation of listed corporations, big mutual funds and individual shareholders with a direct or indirect stake in the market. ...

In general, Paul Sheehan is comparing two different things: GDP and market capitalisation. Not all economic activity is captured by the GDP especially in countries, like Italy, that have large black economies. And market capitalisation only captures the value of large firms.

What Paul Sheehan omits is the destruction of small business. Large firms are listed on the stock exchange whereas small firms are not. The largest contributer to GDP has been the small firms through employment and economic activity.

Shareholders are not to be confused with owners. A small shareholder has no control over a firm he/she has invested in, even with other small shareholders. The rules are stacked against the small shareholder. Lenin, nearly a century ago, said that the capitalist wanted the small shareholders to invest so that the capitalist can control a firm with less capital (at least 40% of the shares is necessary to control a firm). The indirect shareholder (via the superannuation and insurance funds) have no control over their shares.

Don't confuse being a shareholder as being a part-owner.