Ah yes, the government can't be trusted...it's too easily corrupted. But what corrupts the government? Corporate interests! Ironic, no? The government is manipulated by business....and business manipulates by definition
since the driving force of the market system is self-interest.
The trouble is that the goals (aka needs) of society do not always line up with the goals of the market system (aka corporate self-interest). Therefore, the idea that you can any and all social ills through the application of the market system is bound to fail.
Now, take for example a factory along a river that happens to be a water source for a town. The factory produces goods that benefit society. However, in creating these products the factory also produces toxic chemicals that have to be dealt with. According to classical economics, the factory's self-interest drives it to create better products for cheaper prices so that it might become more profitable...thus its self-interest is a boon both to society and itself. But...since its self-interest can be boiled down to profit alone...a familiar equation comes into play. Maximize profit by minimizing cost. So, does the plant increase its costs to safely dispose of the waste...or does it maximize its profit by dumping the stuff into the river? Obviously, the factory chooses to dump its waste.
Here, the needs of society...in this case, not being poisoned
...conflict with the needs of the company.
So the people rally; sick families sue the company. The response of the company is, of course, to defend its interests; to protect its profit margin. Why pay for a full clean up and change of operations when they can, for a much lower cost, reduce the emissions a bit and then put on an add campaign to convince the public of how much they care?
Meanwhile, lobbyists from the company contribute large sums of money to which ever party appears to be the most pro-business and anti-regulation while politicians of that party turn a blind eye to the damage that is being caused.
Some other politician steps up and tries to "fight the good fight" to "protect the people." He/she might be honest in this fight; sometimes he/she is just using the battle as a way to gain popularity. Most likely, it's a mix of the two.
This scenario is so familiar that it would be redundant to describe it any further. My point is that across the board, society's needs are pushed aside for the self-interest of business. Government often becomes a pawn in the battle. Sometimes government actually helps balance things out through regulation; but as the political pendulum swings one way and protections are put in place, eventually it must swing back and those protections are once again weakened or removed.
This is not a "corporations are evil" speech. But we need to understand what corporations are: profit machines. Nothing less, nothing more. They exist to create profit for their shareholders. At this, they are very efficient. Along the way there are goods and services that are created that benefit society. But there are untold costs as well. The goal, in my opinion, should be to find the right balance of regulation...and hopefully one day a business culture with a more moderate and empathetic stance toward the health and growth of society.
Edited by locally pwned, 21 September 2006 - 03:35 PM.
"The whole of science is nothing more than a refinement of everyday thinking." - Albert Einstein
"The world is my country, all mankind are my brethren, and to do good is my religion." - Thomas Paine
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