Ask Prof Wolff: Worker Co-op and Stock Markets

A Patron of Economic Update asks: "Professor, in your idea of a gradual transition to 'Democratic or Co-Op Business' from purely Capitalistic, how do you expect the stock market to react? While I agree that our current system is broken, I still am highly dependent on my 401K to sustain my income. I have to think many of us are."

This is Professor Richard Wolff's video response.

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Showing 2 comments

  • P DiGesu
    commented 2022-01-07 15:46:39 -0500
    Many 401K holders who have options to switch from stocks to treasuries or bonds have done so. Wall St. volatility makes it more and more difficult for small investors to trust long term. Initially market investments were on tangible commodities, not so anymore. I feel that the stock market for the small investor is dangerous and is a potential house of cards and like capitalism it will not just be replaced or go away until it collapses. Compared to half a century ago there is much more evident erosion now visible due to multiple reasons from international competition to corruption now defended by legislature. For addicts or day traders who make their money this way I believe you will have to start working for a living someday, someday sooner than you may believe. Hopefully the problem will not grow to the point of someday devaluating our currency, regardless where we may keep it.
  • Philip Wood
    commented 2021-12-29 18:42:25 -0500
    The corporation, as we know it, is strictly an American invention. Specifically it allows people to invest (pool) their money in such a way that their investment has value in proportion to any other investment. In other words, any share of stock has the same value as other share and each share has one vote. Any one can purchase stock by simply setting up an account with a registered broker. Your risk is limited to no more than your investment. A board of directors is elected by the owners (stockholders) to employ people to operate the company. Any profits are either distributed to the owners (stockholders) or retained for future growth. Hopefully increasing the value of their stock.
    This basic concept has allowed us to build things and create more jobs with better pay than anywhere else on earth. Is our system perfect-of course not. But it is still a in progress. Is a person flipping burgers going to earn the same pay as an engineer with a masters degree and fifteen years experience? No and never will. I earned a paycheck like most everyone else. The difference is how you use your money. You can enjoy it now and do without later-or you can do without now and enjoy it later.

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