Socially Responsible Investment - SRI

And finance Allah shmoop What is capitalism Oh well there

are really two faces of capitalism you know kind of

like Aria on game of thrones Yeah or like any

little kid trick or treating in Halloween or you know

two face So let's start with what capitalism is not

Hello Communism Yes your darkness our old friend Communism is

all about the government being quote smarter than the market's

unquote that is Communism believes that via central planning in

estimating and bureaucratic controls the markets for pretty much anything

can be run better fairer and more efficiently than by

its polar opposite cousin capitalism That's the economic application to

the political will that under a communist system politically everyone

is equal fish you know two cellphones good for cellphones

bad Something like that Whereas communism is a frank instant

ian attempt at cloning in or reproducing life in a

lab and then copying it market by market locale by

locale capitalism is well financial Darwinism Survival of the financially

fittest More or less Communism failed globally in hindsight that

so much for its ideology of governments controlling things But

for the one little element that was never addressed in

the Soviet laboratories where communism was at that element Yes

corruption Yeah When central planning happens enormous power is concentrated

among a very small number of individuals usually individuals who

came to power through Machiavellian means often military or other

yes men Grey flannel suit wearers not through believers in

a cause innovators visionaries or business runners So the very

powerful became very corrupt and the ideology of political communism

I'LL never really came to be tested on a global

stage fairly and squarely where it has been tested and

works has been in tiny enclaves with rare compositions Take

the Kibbutz in Israel Well a kibbutz is a collective

farm Everyone shares equally and well pretty much everything The

farm produces one for all and all for one like

Israeli Musketeers or something like that The big diff Well

they're all equally well educated They're all from the same

background same culture same unfortunate run ins with boils So

it's easy to divvy things equally when you feel like

the guy or gal across the table was truly equal

to you In talent and drive and other natural gifts

you get two cell phones and you get to cell

phones and you get two cell phones Yeah all equal

And yeah a kibbutz structure would never work in a

large city where the disparity and talent is usually massive

from top to bottom So where does that put capitalism

Well structurally capitalism refers most directly to a frictionless set

of transactions No controls no governing no government just perfect

markets where supply and demand intersect here and prices live

within nana meters of here There isn't the kind of

one person can change everything kind of corruption that you

get in a central bank or central allocation system The

capital markets the brutal Darwinism of companies competing in the

marketplace gives a kind of truth or honesty or really

quote fair unquote price that applies more or less everywhere

in the system At its most extreme we witness capitalism

at work in the stock market At any given moment

tens of thousands of investors are inspecting what Amazon is

really worth and letting their investing dollars speak for themselves

The trading of stocks is almost a perfect market with

no central government dictating what it thinks Amazon should be

Trading at two thirty p M On a Tuesday in

a communist stock market While the government might dictate that

well today Amazon should trade for fifteen hundred twelve dollars

a share and for a ten dollar fee per share

trade paid to the government trader you too can be

a proud owner but that's the price Fifteen hundred twelve

bucks Take it or leave it Communism in this sense

runs is a kind of command economy That said the

U S Is not a perfect capitalistic set of markets

either It's just a relatively capitalistic approach to transacting in

mark but when compared with other systems of commerce in

the US we have laws they're actively in fourth and

violators are punished severely and this has been going on

for centuries The positive result Trust in general Investors around

the world trust in the American capital market system They

trust that accounting and financial disclosures are fair and full

and honest Just remember that capitalism is financial Darwinism under

the fair rubric of laws and structures analogous to what

biology and physics and geographic location due to the evolution

of species of animals cos that best fit their contemporaneously

environment thrive and those that don't well don't and somewhere

Toys R Us and the Dodo Bird are living happily

ever after together you know along with Sears and soon

target in a whole bunch of others that'LL be Amazon