It would be beneficial to require shareholders to hold their shares for at least four years.

Currently, capital mobility is such that it is possible to buy shares and resell them within the same day with just a few clicks. Computers are programmed to carry out these transactions.

This has serious consequences.

In the vast majority of cases, shareholders are no longer involved with the companies in which they hold stock. They no longer take any risks. They do not care about the company’s long-term viability, even though they are the ones with the power to make important decisions for it. As a result, they prefer to vote to distribute all profits to shareholders rather than investing. They are not concerned with the company’s reputation and think only of short-term profits. This encourages the production of low-quality goods. They can ignore legal fallout and leave the company before it is brought to trial. They can produce dangerous goods or pollute the environment without facing any consequences.

Furthermore, as soon as a company starts turning a profit, it can be bought out by anyone with sufficient funds. The people who invested in and founded the company — who may have received subsidies from their country — can no longer make any decisions. This favors those who have access to loans, , for example, Americans.

Requiring shareholders to hold onto their shares for four years would help reduce these risks. In fact, only one-quarter of the shares could be renewed each year, which would allow companies to protect themselves from takeovers. Shareholders would have to face the law and the consequences of their decisions. They would need to stay informed about the company and allow it to invest in order to guarantee profits in the future.

The cooperative is a more desirable model because decisions would be made by the workers — those who know the company best and depend on it for their income.

Translated with DeepL and Ollama TranslateGemma