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Investing for a property-owning democracy? Towards a philosophical analysis of investment practices


Marti, Emilio (2013). Investing for a property-owning democracy? Towards a philosophical analysis of investment practices. Analyse & Kritik, 35(1):219-236.

Abstract

In this paper I show why investment practices matter for a property-owning democracy (POD) and how political philosophers can analyse them. I begin by documenting how investment practices influence income distribution. Empirical research suggests that investments that force corporations to maximise shareholder value, which I refer to as ‘shareholder value investing’, increase income inequality. By contrast, there is evidence that socially responsible investing (SRI) could bring society closer to a POD. Following that, I sketch how financial regulation fosters investment practices and discuss how SRI could be boosted if regulation attempted to influence investment decisions, although many people in the public discourse would see this as exceedingly patronising. Finally, I outline how political philosophers can evaluate financial regulation. I argue that drawing on Hegel or Rawls helps to justify efforts to influence investment decisions and that proponents of a POD should therefore develop and support regulatory ideas which foster SRI.

Abstract

In this paper I show why investment practices matter for a property-owning democracy (POD) and how political philosophers can analyse them. I begin by documenting how investment practices influence income distribution. Empirical research suggests that investments that force corporations to maximise shareholder value, which I refer to as ‘shareholder value investing’, increase income inequality. By contrast, there is evidence that socially responsible investing (SRI) could bring society closer to a POD. Following that, I sketch how financial regulation fosters investment practices and discuss how SRI could be boosted if regulation attempted to influence investment decisions, although many people in the public discourse would see this as exceedingly patronising. Finally, I outline how political philosophers can evaluate financial regulation. I argue that drawing on Hegel or Rawls helps to justify efforts to influence investment decisions and that proponents of a POD should therefore develop and support regulatory ideas which foster SRI.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:2013
Deposited On:30 Aug 2019 07:44
Last Modified:25 Sep 2019 00:42
Publisher:Lucius & Lucius Verlagsgesellschaft
ISSN:0171-5860
OA Status:Green
Free access at:Publisher DOI. An embargo period may apply.
Publisher DOI:https://doi.org/10.1515/auk-2013-0117
Other Identification Number:merlin-id:8793

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