Greed

Capitalism is presented as the best economic system because it encourages individual initiative for the betterment of oneself, one’s family and, ultimately, all of society. What they don’t want us to focus on is the one aspect of capitalism that trumps everything: It encourages greed.

Some people hold an almost religious view of capitalism and “the market” as essentially good or, at least, neutral. But how can anyone seriously believe that it’s neutral, let alone good, when its very structure encourages the accumulation of greater wealth in fewer hands?

I believe that in recent years the whole paradigm of business has shifted. In the past, businesses worked to produce the best product or service at the best price in order to gain market share and profits. To do so, businesses needed to adhere to certain minimal standards in the treatment of their employees, their suppliers, their customers and the environment. Few businesses did this all the time, and many didn’t do it well. But the point is that to succeed in business, to make a good profit, it was necessary to make at least some effort to be a “good citizen.”

That’s all changed. Now, the only thing that matters is maximising profit and the return to shareholders. Screw everything and everyone that gets in the way of that goal.

The proof is far too long a list to include here, but consider just a few: Tobacco companies continue to sell products that they know to be deadly, and fight every effort at regulation. Some large, profitable corporations in America didn’t made as big a profit as shareholders wanted, so the share price fell, and the company then laid-off workers in an attempt to increase profits. Other companies have engaged in deceit in accounting practices, manufacturing or price-rigging.

All of these companies were only acting in accord with the modern business paradigm: They’re all trying to maximise return to shareholders. If that was the only concern in the world, they’d be heroes.

But to reap these rewards for shareholders, real people are made to suffer. It’s not just about companies continuing to fight paying decent wages to workers, nor their efforts to block unions. The larger effect is social. For example, millions of Americans are unable to afford even basic health care.

Meanwhile, an unholy alliance of politicians, business leaders and sometimes even religious leaders works to keep people from realising the extent to which big business is ripping them off and screwing them over in pursuit of higher profits. By keeping people divided, straight against gay, white against non-white, middle class against poor, these modern day robber barons can safely laugh all the way to the bank.

The trick, in my opinion, is to find a way to stop the greatest excesses of big business, while not discouraging individual enterprise. As a thoroughly Western individual, I quite like the freedom and independence that our culture offers. But that doesn’t give big business permission to do whatever it wants in the pursuit of profit. Healthcare, for example, is a human right, not a privilege to be given only to the rich or middle class.

To be sure, business will moan and cry whenever they’re forced to do what in their hearts they know is the right thing, and the trans-national corporations will attempt to get around national laws by moving operations to countries with loose regulation. This is why a strong international regulatory framework is so important.

I’m not terribly optimistic that this will happen. Bald greed has taken hold in corporate boardrooms to an extent not seen since the 1980s, and politicians don’t seem to have the spine to taken them on.

Here in New Zealand, at least, there’s some good news. The Commerce Commission fined timber products company Carter Holt Harvey for deliberately selling sub-standard housing timber (at the time CHH did this, the company was foreign owned). The Commission also fined Telecom New Zealand for overcharging customers over a 17 year period. In both of these cases, the companies knew of the problems but did nothing to fix them.

The government, too, has moved to force Telecom to unbundle the local telephone loop, opening up the copper wire phone network to competition. The recent moves against Telecom came after successive governments hesitated to act against the company because of its huge dominance of the New Zealand share market.

Sometimes, governments or regulators are our only defence against rampant big companies. It would be nice to be able to depend on them more, but all too often politicians are lacking a spine and regulators lack teeth. It’s good to see that at the moment, at least, the people of New Zealand seem to have some protection from the excess of big business and its greed.

For related content, I recommend The Gay Expat podcast episode 25 (GEP 25: More Important Than Money), in which he summarises other podcasts discussing other aspects of this issue and offers interesting commentary. Links to the other podcasts are provided on his site.