Hoarding Capital Done Right
Hey Jessenomics professors
The internet has opened us up to a global community with cross border opportunities and achieving scale like never before. Capital has been pushed into creating large monopolies and oligopolies in various industries from food and medicine to internet access and content distribution online. These large companies are often zombie companies that make no profit but are pumped full of cheap money by banks to dominate the market.
Once they grab hold of enough of the market share they extract as much capital as they can from consumers who see them as the only option and then offset their balance sheet by hoarding this cash. The capital is not used for proposed innovation as they tell you, it is used to prop up company value and drive value for shareholders.
Trillions of dollars are being held by corporates effectively removing. Companies may hold money for future acquisitions, for tough economic times ahead, for expansion but the amounts being kept by these large companies are far in excess of reasonable financial planning.
Illustration by Andrew Rae
All A Hoard
However, another theory which could be true is that hoarding cash means you remove it from circulation and with less capital floating around there is less chance of companies able to compete with you. You effectively ring-fence and competition and if by some miracle they are able to break through you have the cash to buy them out.
It's a contingency plan to effectively suck as much out of the economy as possible to benefit a few people. This type of behaviour isn't going to change and as you can see as plenty of benefits for companies but with supreme control of funds and company value by a select few there's no easy way to change this behaviour.
So if we cannot change the behaviour, what about encouraging it in a way that benefits more people? So how would we do that? Hmmm, with the blockchain of course.
Utility of funds
Stocks are a speculative asset and its the markets way of valuing a company and is not really tied to cashflow but rather results per quarter and other internal and external factors. It's only a way to trade ownership/stake in a business and is only really exposed to the general public on IPO phase. This means initial investors will get huge payoffs as retail investors can now get a piece of the action.
So what if companies now begin to work on a utility token model instead, where the product and its performance has a closer correlation with the value of the service. Income derived is then also pumped into the ecosystem thus raising the price of the token. Companies then can effectively hoard cash for whatever reasons while other stakeholders also benefit from the holdings.
Sources:
Let's connect
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"So if we cannot change the behaviour, what about encouraging it in a way that benefits more people? "
YES - I agree. We are all humans and act after that. It is more better to make a good system that ecouraging a lot of people in it - than try to make everone change there minds and be generous and give out to everyone (hrrmm this time my english was setting up walls for me to explain what I want...)
But short - I agree. Hands up and a vote for blockchain ! BEER! 1
But it will take a lot of years before we are there. Specially in my country
The best systems are the ones that use self-interest when something that is good for the individual is also good for the group, everybody wins. Instead of trying to change behaviours or find some sort of balance which people are often resistant to you and the whole thing starts to fall apart. Lol I still get what you're saying and I agree, instead of trying to tax people or force them into certain ways we actually build something we all agree is better
It will take many years and some countries will be faster than others, who knows maybe even new countries will be formed because of it.
!BEER 1
But sometimes I feel that Steemit has exactly this problem
Are we going to FORCE people to act right with downvotes and blacklistning OR buildning something that everyone can use as they want .
Still can not find it so very good with all this rules - in a place that says to be uncensured. But that the problem of liberty.
Are you going for the Splinterland-kickstarter?
I get what you're saying and steemit has a problem in that its created a service built for scale but hasn't achieved scale yet. Many of the problems we complain about today wouldnt be as visible or be gone if we had more daily active users. A better spread of the SP across more accounts would make the system work a lot better
Funny you should ask, I just bought one pack now with some DEC I had laying around and you?
No. I am not talking about the New boosterpacks. I am talking about https://www.kickstarter.com/projects/526764488/splinterlands-untamed-a-blockchain-trading-card-game?
I thought you have to pay with creditcard here
Posted using Partiko Android
Oh I haven't yet checked it out. I see they well over the money they needed though. Perhaps I'll pledge later this month once I bought my monthly BTC
No. I am not talking about the New boosterpacks. I am talking about https://www.kickstarter.com/projects/526764488/splinterlands-untamed-a-blockchain-trading-card-game?
I thought you have to pay with creditcard here
Posted using Partiko Android
View or trade
BEER.Hey @minimining, here is a little bit of
BEERfor you. Enjoy it!Hi, @chekohler!
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