By Daniel Brouse
December 15, 2024
The vast majority of people in business do not aim to exploit the poor or middle class. On the contrary, most understand that the consumer is the driving force behind the economy. Without consumer demand, businesses have no foundation for growth or profitability. This basic principle underscores why a narrative pitting the “rich” against the middle and lower classes is not only divisive but also fundamentally flawed.
Addressing the Real Issue: Ignorance and Arrogance
The widespread anger directed at wealthy individuals or corporations often stems from misconceptions. Rich and successful individuals are not inherently adversaries. The real problem lies in the ignorance and arrogance that fuel an artificial sense of class warfare. This imaginary battle does not serve to bridge gaps or create solutions. Instead, it perpetuates anger, which only leads to further frustration and stagnation.
Constructive Engagement Through Shareholder Activism
Rather than engaging in unproductive outrage, a more meaningful approach would be to invest in the companies you criticize and become a shareholder activist. This strategy allows individuals to influence corporate behavior from within, promoting accountability and ethical practices. Shareholder activism has proven effective in driving real change, offering a productive alternative to simply venting frustrations.
For example, in the 1990s, I was directly impacted by Microsoft’s monopolistic practices. Rather than merely complaining, I purchased a single share of MSFT and established a shareholder activist website. Over the course of a few years, my efforts—combined with those of other activists—led to meaningful changes within the company. This approach proved successful and underscored the power of direct engagement.
I applied the same principle to other businesses, many of which no longer exist today due to various factors, including activism challenging their unethical practices. One notable example is MP3.com, which faced significant scrutiny and ultimately could not sustain its operations.
The Role of Business in Economic Growth
Most people in business understand that the health of the economy—and by extension, their own success—depends on a thriving middle class and consumer base. Exploitation is not a sustainable strategy; companies flourish when they offer value and foster trust with their customers. Businesses that focus on creating innovative products, providing excellent services, and contributing to their communities are the ones that stand the test of time.
Fighting Fictional Battles is Counterproductive
Engaging in a war against a fictional enemy, such as the generalized “rich,” is self-defeating and counterproductive. It diverts attention from actionable solutions and fosters resentment without achieving meaningful results. By redirecting this energy toward constructive efforts—such as education, activism, or entrepreneurship—individuals can make a genuine impact on the systems they seek to improve.
TAKE OWNERSHIP
Being a shareholder, even owning a single share, offers specific legal protections and rights that are valuable regardless of the number of shares you own. Here are some key points to consider:
- Legal Protections:
As a shareholder, you are shielded by certain protections. For example, it becomes significantly harder for a company to sue you for defamation because your status as a shareholder gives you standing to voice criticisms and concerns about the company’s governance and performance. - Rights to Hold the Company Accountable:
Shareholders have the right to sue the company if it acts against their best interests. This applies whether you own one share or a significant portion. While owning more shares increases your influence in voting matters, the legal rights to initiate or participate in actions such as derivative lawsuits are not dependent on the size of your holdings. - The Power of Collective Action:
If you join forces with other shareholders, your collective voice holds more weight, especially in class-action lawsuits. For instance, shareholder groups often come together to challenge decisions that negatively impact shareholder value, such as excessive executive compensation or breaches of fiduciary duty. - Real-World Example – Elon Musk and Tesla:
A notable case involved Tesla shareholders suing the company in a Delaware court over Elon Musk’s compensation package, which they argued was excessively large and not in the best interests of the shareholders. The court ruled in favor of the shareholders, demonstrating the power and importance of shareholder rights in holding even influential executives accountable.
By owning shares, you gain a legal and ethical stake in the company’s operations, enabling you to contribute to its accountability and direction. Whether your aim is advocacy or profit, being a shareholder grants you a platform to engage meaningfully with corporate governance.
Examining the Costs and Benefits of a Microsoft Monopoly
MP3.com: A Consumer Behavior Case Study