Saturday, October 21, 2017
Killing the goose that laid the golden egg
Capitalism is described as "an economic and political system in which a country's trade and industry are controlled by private owners for profit." That's it in a nutshell, and it's worked better and benefited more people than any other economic system the world has ever known. But somewhere along the way our system of classic capitalism has been compromised, subverted, and dare I say even perverted.
My brother and I are the owners of a privately held corporation, meaning the two of us are the only stockholders. On an almost daily basis we do things above and beyond what is required by any regulation because we feel it is the right way to do business. This costs us a bit more to deliver our product, and reduces our profits somewhat, but we're still doing OK, and our clients say they appreciate our extra effort and attention. We'll never get rich doing business this way because we're "leaving money on the table", but we sleep well at night.
Today's publicly held corporations can't afford to leave money on the table. They must lie, cheat, and steal to squeeze every last penny from their customers. If they don't, their thousands of stockholders will demand a change in executive leadership and/or dump their stock, possibly tanking the company. If their product can be made the slightest bit cheaper, they'll do it. Cutting corners has become a fine art. Profits come first, always!
Consider this: Pharmaceutical manufacturers employ tens of thousands of brilliant researchers who spend years developing and testing new drugs that improve our quality of life, and in many cases actually save lives. They're amazing people doing incredible work. God bless them!
One of their creations was "opiods", drugs that can help those with chronic pain. This was a godsend for those hurting. But according to the new rules of what I call "perverted capitalism", pharmaceutical company executives have no qualms at all about turning these miracle drugs into an addictive nightmare for millions (?) of people. Opiod abuse has now become a national crisis. Lives and families have been torn apart, all so the drug makers can maximize their profits. Shame on them!
And, yes, they know exactly what they're doing. They know they're producing many times more opioids every year than can safely be prescribed and used by actual patients. Through their lobbyists they even pushed a bill through Congress last year that prohibited the Drug Enforcement Administration (the DEA) from investigating and interdicting massive opioid shipments to "suspicious" distributors. Had the drug companies failed, the DEA would have put a huge dent in their profits, and to them their profits are more important than peoples lives. That's just wrong!
Then we have corporate mergers that have the effect of reducing competition and inflating their bottom lines. Remember when we had Exxon and Mobil and Chevron and Texaco? Now we have Exxon/Mobil and Chevron/Texaco. United and Continental merged to form the new United Airlines. Delta and Northwest merged to form the new Delta Airlines. American and US Air merged to form the new American Airlines. Fares are up, and customer satisfaction is down, but airline profits are at record highs.
Remember when Macy's, Neiman Marcus, Lord and Taylor, Saks Fifth Avenue, and many others were all independent companies? Now they're all owned by giant retail conglomerates. Walmart and Amazon have taken over their sectors, too. Remember local hardware stores, mom and pop restaurants, community banks, and independent car dealerships? There are relatively few still in business, left behind in the race to merge, "increase synergy", and maximize profits.
And do I even need to mention corporate subsidies, aka "corporate welfare"? What the hell is that all about? Did they think we wouldn't notice?
I've heard it said your "character" is defined by how you behave when no one is looking. If that's so, then many of our players today have terrible character.
It's no longer about doing what's right, but only about what will make the most money and what they can get away with. At many businesses today doing "right" will get you fired, that's how cold blooded we've become. We're being attacked from within, and we're losing. Capitalism in 2017 is NOT your daddy's capitalism!