Thomas Lunde:
Without having the benefit of Jeff's thought, the question then becomes do
all the citizen who have been issued shares or have borrowed money to buy
shares then spend the rest of their life trading shares as their only
productive activity short of not trading and hoping that the shares you
have
will continue to provide you with a dividend. My guess is that over time,
those with inside knowledge will end up owning all the shares and the poor
will still be with us and the capitalists will just be so much richer.
Steve:
There are some simple mechanisms which might be used to avoid the above
scenario. First, ESOP shares might be vested as retirement only funds, and
not be tradable. The issuer could redeem at age X only for the original
shareholder or survivor/estate. This is not unlike "insider stock" which
goes at original underwritings to the insiders & must be held for a period
of years before resale.
Second, ESOP shares could be non-marginable - that is, one couldn't pledge
them as collateral for leverage (no loan value). That would make the
"borrowed money" case more difficult. If there were publicly traded shares
of the same company, those could still be openly traded and used as
collateral. If the majority of shares *eventually* (over generations)
became ESOP type, workers would outvote non-workers in company policy
decisions, *IF* they had voting rights - which IMO should be manditory & is
so in US as the shares are common stock. I'm unsure about any current
trading restrictions, but believe that most are in qualified retirement
plans with tax penalties for premature liquidation.
Steve
