In Greed We trust
On a recent Fox News broadcast, talking head Brian Kilmeade blasted the upcoming visit to the U.S. by Pope Francis, telling the Pope to stay away. Kilmeade feels the Pontiff made disparaging comments about the excesses of modern capitalism and how it affects the world’s population. The headline of the report for this story read, “Fox News Host Tells Pope to Leave U.S.; He Doesn’t Belong Here; Capitalism is Our Savior.”
What exactly is the definition of modern capitalism? Definition #1: An economic system in which the means of production and distribution are privately or corporately owned and development occurs through the accumulation and reinvestment of profits gained in a free market. Definition #2: Unfettered greed.
Over the past decades, capitalism has proven to be one of the efficient economic structures ever developed. In theory, capitalism allows everyone the opportunity to work hard and present their products and services in a free, open market. When a product is sold, ideally it is sold for more than it cost to produce. The difference between manufacturing costs and selling price is known as profit. Profit has become the prophet of the religion of capitalism.
In my mind, capitalism is still the best economic system. The problems begin when the quest for profit negatively affects large groups of the population and becomes driven by greed. There are at least twenty five synonyms for the word greed. Words such as avarice, excess, and selfishness rise to the top of that list.
Unfortunately, in today’s world, we are seeing greed becoming the norm instead of the exception. Every day, the news reveals a new case of excessive greed that demonstrates how out of control the problem has become.
Michael Shkreli, a thirty-something former hedge fund manager, started a pharmaceutical manufacturing company. The company, called Turing, purchased the rights to market a drug called Daraprim, which has been on the market for sixty years. It is used to treat a life-threatening parasitic infection in new born babies and AIDS patients. Up to three billion people worldwide are affected by the disease which can cause blindness and brain damage. The drug is on the World Health Organization’s List of Essential Medicines and has been available to patients for decades at a cost of $13.50 per dose. Once Turing acquired the rights, it immediately raised the price to $750 a dose. The outcry was immediate from diverse sources such as the Infectious Diseases Society of America and the New York Times. When confronted with heavy global condemnation, Shkreli responded by tweeting lyrics from an Eminem song – “And it seems the media immediately points a finger at me so I point one back at ‘em, but not the index or pinkie.” He claims the increase is to fund research for a better version of the drug despite the fact it has worked well, at its old price, for sixty years.
This is the second time Shkreli has pulled a stunt like these. While working for another company, Retrophin, he took a low cost, low volume drug used for childhood kidney disease and raised the price from $1.50 to $30 a pill, again under extreme criticism. He is also being sued by Retrophin for using company funds to settle law suits against his hedge fund.
What is the reason to gouge victims of rare diseases? I can think of only one: greed.
Volkswagen is one of the most recognized corporations in the world. The company’s revenues for 2014 were estimated to be around $255 billion. And yet, as big and successful as Volkswagen is, in its quest to increase sales and profits, it violated the law under the U.S. Clean Air act. For a number of years, Volkswagen has been installing a software program in its VW and Audi diesel engines that deactivates controls that prevent emissions of carbon monoxide and other greenhouse gases. The system activates only when the car is being inspected. It is estimated VW sold almost half a million affected vehicles in the U.S. alone and as many as 11 million worldwide.
This is not the first time VW has run afoul of U.S. laws. In 2005, VW was fined $1.1 million by the U.S. government for failure to notify the EPA of an emissions problem and address the problem in a timely manner. Fines for this newest infraction could total up to $18 billion in the U.S. alone. Since the VW story broke, their stock crashed and corporate value dropped 30% in the first two days; they announced that they are setting aside over $7 billion to recall fix every affected car; and the CEO has resigned. VW also released an announcement that their profits for this year will be dramatically affected by the looming fines and recalls. What caused one of the most respected global industrial giants to become an international pariah? You guessed it – greed.
The Walton family, heirs to the Wal-Mart fortune, are some of the richest people in the world. Ten percent of everything imported into the US from China comes through Wal-Mart. In 2014, Wal-Mart generated almost half a trillion dollars in revenues. It is consistently in the top two or three companies in the world. Six members of the Walton family own 54% of the company and have an estimated combined worth of $150 billion.
This is the same company hierarchy, management of the largest retailer in the world, which refuses to pay its employees a livable wage. Many of their workers are forced to work one or two other jobs or to collect welfare benefits, paid for by taxpayers, to supplement their income from Wal-Mart. The Walton Family Foundation, a charitable trust set up by founder Sam Walton and his wife, is worth in excess of $3 billion. Total family contributions over the past twenty years adds up to less than ½ of 1% of the Walton fortune. Considering that the six core members of the Walton family are worth about as much as half the U.S. population combined, one would think they would settle for a little less themselves and pay their employees a decent wage or give more to charities. But, I guess any compassionate thoughts about their employees or people less fortunate than themselves are trumped by that ever present motivator called greed.
The Koch brothers, whose combined income makes the Walton family look like pikers, consistently spend enormous amounts of cash to prevent development of viable alternatives to carbon based fuels. They are already incredibly rich, but want to continue to increase their wealth. That’s called greed.
Steve Jobs attacked any company that tried to build an Apple compatible product because he wanted total control of and income from for all Apple products. Why share when you can have it all? I describe that as greed.
Information is coming to light confirming that Monsanto has documentation going back decades proving their number one product, Roundup, is a carcinogen that causes cancer. This information was suppressed by Monsanto for years all in the name of greed.
Can a true democracy survive in an unrestricted capitalistic market? I’m not convinced it can. Unrestricted markets lead to oligarchy. And oligarchy easily leads to fascism. First the “Captains of Industry” and their corporations acquire the major media outlets to control communication. They sow discontent among the general population by broadcasting fear. They divide the population by exposing the public to unsubstantiated threats, virulently promoting differences between opposing groups, buying friendly mouthpiece politicians, and debunking anything that affects their bottom line. Sound familiar? All of this is in the name of greed.
The worst thing this country ever did was to allow Citizen’s United to become law. This has allowed huge corporations unlimited influence in elections. It has opened the floodgates of unlimited financial support for politicians who are friendly to corporate profit oriented causes. It also has given major corporations and their largest investors an unlimited ability to stifle competition.
Essentially, the free market democracy has evolved into a monopolistic closed market with a handful of companies controlling of all major commerce, media, and a government that continues to support them.
Will corporate greed ever disappear? I doubt it. But if we want to survive as a democracy, we must find a way to control it.