Tuesday, September 4, 2012

Invasion of the locavestors

Terence Corcoran wrote a good editorial in the September issue of the Financial Post Magazine.  He referred to recent public discussion of corporate transactions such as Rona, Cogeco and Maple Group.  I wrote this letter to him.
Your September 2012 editorial was on target. When government interferes with a corporate sale, the rights of everyone are violated. In a free market, transactions only take place with the mutually beneficial agreement of both the buyer and seller. Unless the price is high enough for you as a seller to judge you are getting full value, you do not sell. Unless it is low enough for you as a buyer to judge you are getting a bargain you do not buy. When governments protect individual rights neither buyers nor sellers are unhappy with their transactions. By forbidding the sale/purchase of certain shares the state is forcing some people to own them and forcing others not to own them. The rights of both sellers and buyers are violated by such initiation of force.
If you sell your shares, you will then have cash available to invest in other businesses, whether new or existing. No one can tell how many businesses have been prevented from existing or growing because of the use of force against shareholders. The right of all citizens to participate in a free market and benefit from its existence is violated.

Who is to decide which individual shareholder rights will be violated by blocking a sale? What objective principle decides which companies are strategic and overrides the opinions of others. Who decides what is of national interest when a nation is made up of individuals each having their own goals? The people best suited and the only people morally correct to decide these questions are the ones who have put their decision-making ability on the line and risked their own capital by investing in the company, the people who own or wish to own the shares. Who can say you will not make more money elsewhere and bring better "strategic value" to Canada by selling instead of holding, although the question itself shows the absence of a proper morality based on individual rights. 

 Even if someone else is proven correct with time, it is your life, your money and your right to choose how you use it. Those who would stop you are anti-rights, anti-freedom and anti-life.

1 comment:

  1. Congratulations on getting published in the National Post David!

    Paul McKeever
    Leader, Freedom Party of Ontario