The Stock Exchange

What's that you're reading son?

It’s an ad. about die Stock Exchange- jolly interesting.

What’s it say?

Well Dad, it's written like a chat between a boy and his father. The boy’s doing some lessons at school on the Stock Exchange and he’s asking his Dad about them.

School, eh?

Yes Dad, and a posh one it sounds, too —boys called This Minor and That Major and their fathers are jobbers and things like that and I know that’s posh because the ad. says they're the people stockbrokers buy shares from and sell them to.

That’s real interesting, son. Anything else?

Well, it says the Stock Exchange benefits us all, Dad. And we all invest in it I know you pay the insurance man every week but you never told me that that makes you an investor. We must be posh! Think I’ll add Major to my surname.

Hang on, son. That isn’t why I take out an insurance. I couldn’t care less what they do with my premiums; I’ve got to pay them because on my money I’ve got to put something by for when I’m sick or when 1 retire. If there weren't insurance firms I’d probably keep it in an old sock or something.

You’re not like the fathers in this ad., then?

That's it, son.

Anyway, I suppose if you were an investor getting all those profits you wouldn’t really need an insurance policy or anything?

As they say in this ad., son, you’re catching on quick.

What’s it all about then, Dad?

Well, it’s true that I can invest in stocks and shares if I want to. It’s like the old song; if I didn’t eat I’d have money to burn.

But you might get dividends, Dad.

I might. Three or four per cent of what I’d invested, perhaps. I might even make a bit of money buying shares when the price was low and selling them when it was high . . .

But that cuts the other way. If 1 may say so, Dad, you might buy when the price was high and sell when it was low—so you’d lose money.

Correct But whatever happened I could never expect to make very much. How much can I afford to invest? And what sort of dividend or capital gain, as they call it, would I make on it? How long would that last if I got the sa . . . sorry, if I became redundant?

Not long. Who does make money on the Stock Exchange, then?

Just like in any other form of gambling —the big gamblers. But the dividends come from the profits which are made by people like me going out to work for an employer. And you, when you’re old enough to work.

What else comes out of the profits?

Well, an employer has lots of things to pay out of them—rent, interest on loans, perhaps, government taxes, and so on.

So where does the Stock Exchange come in, Dad?

Well, it only deals in the stocks and shares, which are the legal documents which give the right to the dividends. And if a company or something needs more money the Stock Exchange can organise it, by selling lots more of those documents. But this doesn’t alter the fact that profit comes from the exploitation of the working people.

So the Stock Exchange isn’t really necessary?

Well, Son, I suppose that as far as capitalism goes it isn’t a bad idea. Something's got to do the work of the Stock Exchange, just like something’s got to do the work of judges and policemen and insurance salesmen and the rest If they didn’t exist, capitalism would have had to create them, in a manner of speaking. But this makes no difference to you or me, or to anyone like us. We’d be better off in a world which didn’t need all those things.

So the Stock Exchange isn’t all it’s cracked up to be in this ad., eh, Dad?

Well, Son, like I've always said, don’t believe all you read in the papers.