From: Gordon Swobe (gts_2000@yahoo.com)
Date: Sun Sep 15 2002 - 10:46:35 MDT
Dan wrote:
gts wrote
>> I'm sorry but that's not correct. The "capacity"
>> of earning money from a
>> hammer cannot be separated from its utility as a
>> hammer, as you do
>> above.
>
> By "cannot be separated", I should presume you mean
> "ought not be separated"
I mean that you cannot logically speak of a hammer
having some property that gives its owner an ability
to earn a living separately from the hammer's property
of "utility." The carpenter buys the hammer because of
its utility in driving nails. He earns a living
because other people are willing to pay for the
utility of having their fences and porches fixed by
him and his hammer. These economic transactions are in
a category completely separate from those we are
considering that occur in the market for financial
assets.
>, because it's trivial to
> draw a distinction between buying goods that give
> a person happiness (utility, as the utilitarians
> call it)
Utilitarians are those who advocate the ethical
philosophy of utilitarianism. In case you're not clear
on this, one needn't be a utilitarian to be an
economist.
> I'll charge that even the economists call the
> latter "capital", and that
> the hammer has the characteristic I've described in
> common with stocks.
To a carpenter, the hammer is "capital equipment," a
term which should not to be confused with "investment
capital." That both terms contain the word "capital"
should not be misconstrued to mean that an investment
in capital equipment (hammers, trucks, etc) is
anything like an investment in financial assets
(stocks, bonds, etc). The former have utility value
but no intrinsic value as a investments, per se. While
business owners "invest" in capital equipment, capital
equipment is depreciated each year on the books and
eventually replaced by more capital equipment.
Conversely, financial assets have no utility but they
do have intrinsic value as investments. It's very
important to make a distinction between the two.
You mentioned in a previous message that I had
mischaracterized your question and Lee Corkin's (sp?)
question. Perhaps I mischaracterized yours but not
his. Just to be clear, I was not addressing anyone's
question, necessarily. I entered this thread when I
saw someone writing words to the effect that shares
have no value unless they eventually pay a dividend.
Lee Corkin insisted that I was wrong, and so a debate
ensued.
I did not address your words at all except in so much
as I answered the question in the subject header.
The answer to your question in the subject header is
that the stockmarket supplies corporate profits to
shareholders in the form of dividends or capital
appreciation or both.
More later. I'm writing from out of town on a friend's
computer....
-gts
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