Does Stock Ownership Lead To Conservative Values?
September 26, 2002
About half of households own shares, up from a third in the late 1980s. In the late 1990s, conservative commentators seized upon the idea that expansion of stock ownership was transforming national politics and psychology. Politics was supposedly drifting to the right because more people had a stake in capitalism.
However, if shareholders became mini-capitalists, public opinion polls should have shown a rise in pro-business attitudes in the 1990s. But a review of surveys by Karlyn Bowman of the American Enterprise Institute found attitudes have remained remarkably stable. Americans generally like the free-enterprise system but are skeptical of corporate behavior.
- When asked in 2000 whether companies should "make maximum profits," only 36 percent said "yes."
- This was higher than in 1974 (24 percent) but almost the same as in 1981 (33 percent).
Another survey asks whether "what's good for business is also good for the average person."
- In 1981, 57 percent thought so, but near the market's peak in 1999 that had slipped to 48 percent.
According to Washington Post columnist Robert Samuelson, greater shareholding leads to more government activism and regulation. It increases the political impulse to tinker with business and the stock market because the investor class behaves like other aggrieved groups who look to government to solve problems.
Greater shareholding didn't change the national consciousness because stocks were not promoted as an exercise in risk-taking, which is the nature of capitalism. Stocks were sold as a free-enterprise entitlement. Stock market investors expected to get rich.
Now Congress has been called upon to intervene in a host of ways. The ostensible aim is to improve the integrity of the market. The unstated aim is to restore higher stock prices, which is what investors want.
Source: Robert J. Samuelson, "The Stock Market: Not an Entitlement," Washington Post, September 25, 2002; Karlyn Bowman and Todd Weiner, "Attitudes Toward Business," AEI Special Analysis, August 23, 2002, American Enterprise Institute.
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