Money Flow

It’s common place to assume a company’s main responsibility for its profitability is to its shareholders. To this end it aims to use the cheapest labour, the most economic means of production and maximise its sales. Its shareholders responding to market forces would otherwise, by accepting a lower share price, reduce the companies worth. It’s like if people don’t like you your bank balance will go down. The diagram arrows show the relative responsibilities to and from a company and in effect show the influence the parties have over each other. As the vast majority of workers work for companies these influences dominate our economy. It’s clear the wider society and the company’s labour force have far less economic influence than the Directors and shareholders. As economic influence directs money flow it’s obvious the flow is from right to left. Shareholders demand profit “or else” and directors become grossly overpaid. This ‘money pump’ is also leaving society and the labour force increasingly impoverished. Health, education, the police, defence and infrastructure are all under funded and mean employment practices abound. In the past unions plus labour laws and higher and more unavoidable taxation restricted these flows but with avoidable taxation and little union pressure they’re escalating as never before. This is gush up not trickle down economics. But what will be the result? With a failure to invest in health, education etc the work force will become poorly educated, unhealthy, stressed and demoralised, an army marching on an empty stomach. Companies, the hub of our economics, will become stranded. A neglected workforce, a diminishing home market and, as profits fall, deserted by shareholders. It’s not some moral duty that companies pay taxes and provide fair conditions of employment it’s enlightened self-interest. It’s also enlightened self-interest that governments preside over a vibrant economy and an equally vibrant society.