Capitalism is not the best fit for a decent society. This is becoming increasingly clear as the world becomes more accessible to all. Nonetheless, it is an essential tool in building and developing the science and technology required to house a good society. At present there is no alternative and little sign of one on the horizon. Therefore, to enhance human progress all we can do is rein-in, to prevent the worst excesses of the beast.
Left unbridled, capitalism has no conscience, no heart, no sense of justice. Recent history tells the story.
- DDT used between 1945 – 1972 when it was banned from use as an agricultural insecticide having been linked to ecological degradation and testicular cancer. www.en.m.wikipedia.org
- Thalidomide – released in 1957 in Germany as a sedative or hypnotic. Soon it was used to alleviate morning sickness in pregnant women. The result was over 10,000 births worldwide with a 50% death rate. The survivors had severe disabilities.
“The thalidomide disaster is one of the darkest episodes in pharmaceutical research history”. www.sciencemuseum.org.uk
And now we are under threat from genetically modified organisms. No! – GMO! www.theguardian.com/environment/2015/apr/16/eu-new-gm-genetically-modified-foods
The shenanigans of the business world are similarly dark. Enron was the biggest bankruptcy in US history until WorldCom. Enron hid $$billions in debt before their bubble burst. WorldCom used loose accountancy methods to maintain their share price. Profit the main motivation!
These events led to the Sarbanes-Oxley Act of 2002. The law was passed by Congress to prevent fraudulent accounting activities by corporations and, “…the wilful destruction of evidence to impede a Federal investigation”. Five companies in all were cited.
It would be good to think that the law was changed because the politicians were looking after the best interests of the ordinary people. Unfortunately, these companies went OTT and cost shareholders a lot of money. It shows just how untrustworthy business truly is.
In the UK in 2014 Tesco the large supermarket also used loose accountancy to suggest they had £300 million more in their coffers than they actually had. Now we have the Volkswagen debacle and the fixing of diesel car emissions. It appears that the EU politicians knew the details in 2013 but kept quiet about it. Who can Ordinary Joe trust?
The Harvard economist Dani Rodrik, The Globalization Paradox sums up the market quite succinctly,
“In short, markets are not self-creating, self-regulating, self-stabilizing, or self-legitimizing”. P22
Honest government is the only way to control the excesses of the market place. There are so many known examples of poor business practice. But how many remain hidden? It would seem that governments will only act in times of crisis.
Every economic crash has had at its base the obsessive pursuit of profit. The most recent major crash of 2008 left a sound of anguish the world over, and we are still experiencing the reverberations today. “This period also ranks among the most horrific in US financial history.” Paul Kosakowski, www.investopedia.com
The main cause lies with the government of America and their decision to repeal the 1933 Glass – Steagall Act in 1999. The act had regulated the banking sector. Once removed, at the behest of the big boys, the saliva drooled and the wolves howled their hunger for some ripe pickings. Deregulation was the key element in the great crash but had its foundation in American Republicanism.
In the wake of the crash many other devious scams have been unearthed.
- Libor – the fixing of the bank lending rate.
- Foreign exchange – forex – fixing of the rate.
- PPI – false insurance policies
How many other double deals have yet to be uncovered?
American Republicanism arrests our development by its insistence on the political stance of individualism and the free market economy. This belief system is supported by the neo-classical economists who promulgate the notion that we are all individual self-interest motivated consumers. However, such a premise negates the power of marketing and dismisses the colossal amounts spent on advertisement. It also promotes the view that the market is the benefactor of society.
As consumers we are often tricked by marketing ploys into making a purchase by the placement of goods on supermarket shelves. By the need to belong, this has many of us following trends: fashion, phones and food etc. Note also the spending of $£ billions on building a ‘brand’ name with the subliminal message that nothing else is quite as good. Marketing is the markets sheep dog!