I fear there may be a misunderstanding here, let me try to explain this more clearly.
Public markets investors largelyareinvested in the company’s customers.
There are two cases:
The customers are corporate bodies
The customers are individuals
If the customers are corporate bodies, then a universal owner almost certainly is directly invested in them.
If the customers are individuals, then a universal owner is invested in them in a natural language sense, rather than a finance sense. I.e. they don’t own a legal stake in the person, but they are invested in them in the sense that they have incentives to see them being better off.
Why?
Let’s illustrate with the McDonald’s example
Imagine that McDonald’s decided to conspire to ensure that they somehow got the same number of meals sold, but everyone had to pay more (e.g. by some sort of collusion with other food/restaurant providers).
Then everyone outside of the restaurant/food sector would be worse off (this is the heart of your concern).
If they are worse off, they have less savings (bad for the banking sector) and spend less on trinkets/holidays/other things (bad for the trinkets/holidays/other things sectors).
In other words, benefiting McDonald’s at the expense of the wallets of the general public is bad for the wider economy.
The upshot: the impact on the wider economy may make Universal Owners less likely to want to form cartels
If I think of myself as being purely an investor in McDonald’s (i.e. no UO thinking):
A McDonald’s cartel means more money comes to McDonald’s --> MORE PROFIT
If I employ UO thinking, then there’s two factors:
A McDonald’s cartel means more money comes to McDonald’s and the other cartel members --> MORE PROFIT
A McDonald’s cartel means the wider economy is worse off, which means the other companies in my portfolio perform worse --> LESS PROFIT
Is item 2 big enough to outweigh item 1? I don’t know—I haven’t done the modelling. But what I can say is:
Without UO, the incentive to form a cartel is still there
With UO, investors now incorporate factors which may push in the direction against cartels
Cartels are an example here, and could be substituted with anything that has the property that collusion between companies leads to benefits to them at the expense of the economy as a whole
I fear there may be a misunderstanding here, let me try to explain this more clearly.
Public markets investors largely are invested in the company’s customers.
There are two cases:
The customers are corporate bodies
The customers are individuals
If the customers are corporate bodies, then a universal owner almost certainly is directly invested in them.
If the customers are individuals, then a universal owner is invested in them in a natural language sense, rather than a finance sense. I.e. they don’t own a legal stake in the person, but they are invested in them in the sense that they have incentives to see them being better off.
Why?
Let’s illustrate with the McDonald’s example
Imagine that McDonald’s decided to conspire to ensure that they somehow got the same number of meals sold, but everyone had to pay more (e.g. by some sort of collusion with other food/restaurant providers).
Then everyone outside of the restaurant/food sector would be worse off (this is the heart of your concern).
If they are worse off, they have less savings (bad for the banking sector) and spend less on trinkets/holidays/other things (bad for the trinkets/holidays/other things sectors).
In other words, benefiting McDonald’s at the expense of the wallets of the general public is bad for the wider economy.
The upshot: the impact on the wider economy may make Universal Owners less likely to want to form cartels
If I think of myself as being purely an investor in McDonald’s (i.e. no UO thinking):
A McDonald’s cartel means more money comes to McDonald’s --> MORE PROFIT
If I employ UO thinking, then there’s two factors:
A McDonald’s cartel means more money comes to McDonald’s and the other cartel members --> MORE PROFIT
A McDonald’s cartel means the wider economy is worse off, which means the other companies in my portfolio perform worse --> LESS PROFIT
Is item 2 big enough to outweigh item 1? I don’t know—I haven’t done the modelling. But what I can say is:
Without UO, the incentive to form a cartel is still there
With UO, investors now incorporate factors which may push in the direction against cartels
Cartels are an example here, and could be substituted with anything that has the property that collusion between companies leads to benefits to them at the expense of the economy as a whole