Tuesday, January 28, 2014

Greed and avarice

I’ve often talked about corporate greed, but there’s another side: Investor greed. It’s actually the root cause of corporate greed as investors demand ever-higher profits. Today there was a good example.

Apple announced sales from the fourth quarter of last year, and they were pretty awesome. Sales of iPhones set another new record for the quarter, 51 million phones were sold, up some 7% on the same period in 2012. Sales of iPads were even better, up 14% on the same period 2012, up to a new record of 26 million units sold.

So, with all this good news, how did investors react? By dumping Apple shares, which lost 8% in value. Yeah, Apple again sets sales records, but investors want out. Makes perfectly logical sense, right?

The problem is that Apple didn’t make ENOUGH money—sales of iPhones may have set a new record of 51 million, but investors “expected” sales of 55 million. While gross revenues were pretty much what had been predicted, net profits were flat. Oh noes! Investor panic!

The obsessive fixation on short-term profit is what caused the global financial crisis: Nothing mattered but making as much money as possible as quickly as possible, damn the risks and potential consequences. It’s what leads corporations to close profitable factories, throwing people out of work and often bankrupting suppliers, because those factories aren’t profitable enough.

This is not capitalism. I’m not sure what the best word for it is, but right now I’m calling it “corporatism”, and it’s the mortal enemy of true capitalism as well as the enemy of economic and political freedom. It is, in fact, nothing but pure, unrestrained and prideful greed.

If we can’t return to capitalism based on human values, then we need a new system that replaces corporatism, one that doesn’t encourage and reward greed and avarice. Until people are back in control of their economy and governments, we'll see more bizarre displays of corporatist greed and avarice—and we’ll have more global financial crises.

Something has got to change, and it must be to put control and power back in the hands of humanity, and not in the hands of the greedy.

Apple's iPhone sales, revenue forecast fall short; shares slide - Reuters
Apple's 1Q results highlight need for new products - AP
Apple shares plunge as sales disappoint – The Telegraph

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