Entry 1952, on 2018-12-04 at 20:43:44 (Rating 3, Comments)
I recently listened to a podcast describing the current problems relating to the use of asbestos. One person being interviewed used the phrase "horrific deceit" to describe the dishonest and irresponsible ways that corporations tried to hide the fact that asbestos was dangerous, and I couldn't help but reflect on how familiar that phenomenon was.
Because I have seen exactly the same method used to discredit any inconvenient scientific findings which might negatively affect big business. The most obvious example is tobacco, of course, but now we have a similar campaign against climate change. In fact, some climate change denial is originating from the same people who participated in tobacco harm denial.
There was one trick used by the corporations which I found particularly flagrant. That was that when people who worked in industries where asbestos was used started getting sick they tried to blame it on smoking! And, of course, the tobacco companies were already running a campaign questioning the findings on the damage done by tobacco. It was a pretty cunning plan, because it meant another industry took the blame and had to fund the propaganda campaign. I guess there actually is no honour amongst thieves!
But there should be no surprises that this happened, because according to the rules of capitalism that is exactly what a company should do. The primary motivation for a company, at least according to many commentators, is simply to maximise return to shareholders, and any peripheral issues such as the death of employees or customers is not their concern.
The classic response to this is that any company which is responsible for such obvious harm from their operations will be punished by the market, because people will refuse to deal with them. So the market should cause a correction to that behaviour and the company will be forced to improve its processes.
And, as the classic New Zealand beer ad says: yeah, right!
I'm not totally against capitalism. I'm just suspicious of claims that it must be left to operate with maximum freedom in an uncontrolled marketplace, like many conservatives and all libertarians believe. And just because I'm skeptical of capitalism, that doesn't mean I'm a communist, or even a socialist. I have enough awareness of the conspicuous failures of socialist states to realise that it isn't a viable alternative, at least in the forms we have seen so far.
But capitalism has a very dark side, and considering its underlying principle of maximising profit, that shouldn't be a surprise to anyone. In fact, there are very good reasons arising from fields such as behavioural economics and game theory to believe that the free-market model cannot work in theory, and numerous examples show it doesn't in practice either.
So if socialism doesn't work and capitalism also has major failings, what is the answer? Well, the problem is treating these economic systems as if they were something pure, like something we either use or don't use. A more realistic approach might be to adopt a system which uses the two approaches to enhance and control each other. Socialist principles are effective at limiting the worst excesses of capitalism.
Of course, the problem is where to draw the line. Should we have a 90% capitalist system, or 75%, or 50%, or maybe even less? Too much capitalism leads to general exploitation, environmental harm, and repression of worker rights. Too much socialism leads to an inefficient economy, too much centralisation of decision making in government, and lack of competitiveness.
The correct balance might depend on the exact circumstances. For example, when we have a major problem to solve which requires a united approach, capitalist individualism must give way to collective benefit. And I would suggest that climate change is that issue today. We really need to work together cooperatively to solve this problem.
A capitalist approach too easily leads to the result well understood by the principle of the tragedy of the commons. It is entirely rational for every business to continue to increase greenhouse gas production while relying on everyone else to reduce theirs. After all, if a company reduced their levels and others didn't, that company would be uncompetitive and would soon fail, but if the others did reduce levels then the company's continued production wouldn't be an issue amongst the bigger decline. So whatever anyone else does, it it to every company's advantage to not act.
That is why a system which puts a cost on every individual company is the only way to control the big issues. If there is a cost to producing greenhouse gases which is not affected by a company's competitors actions, then making reductions is the logical response. Behavioural economics shows that not all actors in an economic system act rationally, but it's still a good mechanism in cases like these.
As an individualist, I don't like laws, regulations, and controls, but the facts are really irrefutable. Free economies can never work, and we need some form of guidance, which must regrettably be from governments, despite their obvious problems. If we don't control capitalism we will have environmental destruction, exploitation of workers, and a general race to the bottom. Sure, while we're on that downward path we'll have some nice cheap smartphones and TVs, but what good will those be when the destruction inherent in that system catches up with us?
The asbestos companies practiced horrific deceit to increase their own wealth without regard for their employees. Capitalism in general can also be horrifically deceitful. But only if we let it.
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