The Divine Right of Capital: Dethroning the Corporate Aristocracy

The most basic mythology exposed: that those who speculate have superior & perpetual rights over those who earn by labor. The bias in our mass media & legal institutions is so outrageous that at first it's difficult to accept just how deeply we are being bluffed.

I am now on my second reading. If you only read one nonfiction book this year (instead of the Wall Street fiction & PR positioned as fact) do yourself a huge favor & buy this book.


Necessary New Perspective   July 7, 2003
 11 out of 11 found this review helpful

For anyone who's ever felt a disconnect between what they're hearing about the economy and what they're experiencing personally, Marjorie Kelly's book is very enlightening. She challenges some of the fundamental assumptions we hold about the stock market's role in the overall economy. Particularly in the context of current debates about corporate responsibility legislation and the privatization of Social Security, this book is very important. "The Divine Right of Capital" is a must-read for social justice activists and market conservatives alike as we all try to figure out what to do with this broken system in post-Enron America. Love them or hate them, the ideas Kelly offers up are innovative and groundbreaking.

Note: I've talked to a couple of more radical/anarchist/extreme whatever types who found this a little on the tame side because it's so darn grounded in reality. If you're really about tearing down the whole system (not my approach, but best of luck), there might be more satisfying extremist rants out there. For everyone else, read this now!


Unclear; Very Confused; Muddled Thinking   June 23, 2003
 13 out of 56 found this review helpful

Wonderful example of how undisciplined, muddled thinking can create unsound arguments, based on invalid premises, that yield conclusions that will confirm one's biases. Perhaps in a follow-up book, the author will "prove" that the world is flat. An early mistake: She declares that it is (mostly) false that stockholders fund major public corporations, noting that shares trade in secondary markets. Accordingly, she draws the conclusion that there is no reason that corporations should maximize the interests of stockholders and minimize the interests of shareholders, and that it would be just as appropriate to put the interests of employees first. In fact, clear economic thinking reveals that successful corporations do make the interests of employees a high priority, because a corporation with unhappy employees has difficulty retaining employees, which makes for an unsuccessful company. Further, when a corporation raises capital, it often does so by means of a public offering of securities, which is really an agreement between the corporation and the stockholders where the stockholders give the corporation money in exchange for the right to an ownership interest in the corporation. Whether the shares stay in the hands of the original purchaser or whether the purchaser sells them in secondary markets is not germain; whoever holds the shares holds the right to the ownership interest, which may yield value through appreciation, sale or dividends. If you think her argument that it would be equally appropriate for a corporation to maximize payments to employees and minimize the interests of stockholders, just try this little exercise: Form a coproration and attempt to raise capital to run the corporation (including to pay employees). Then tell the potential investors of your plan to minimize value to stockholders. Then count how many of these potential investors actually invest their money in your corporation. (Hint: if you guessed more than zero, you're too high.)